Innovator Scotland magazine by David Hughes

Don’t overlook the obvious in your search for new ideas It may seem obvious, but when you have a good idea, you should safeguard it. So it’s vital you work with people who have the right experience and expertise to protect your intellectual property – and help you fully exploit its potential. At Marks & Clerk, we take time to understand your business – whatever your size, sector and location – and tailor our services to create the most effective intellectual property strategy for you. From the smallest inventive step to the biggest commercial leap, we’re here to ensure you get maximum value and benefit from your intellectual property. Marks & Clerk is the largest firm of patent and trade mark attorneys in Europe. With 11 offices across the UK, including 3 in Scotland, and an impressive international network, we’re the obvious choice to meet your IP needs locally and globally. To find out how we can help protect your interests, email scotland@marks-clerk.com or visit our website.

www.marks-clerk.com 2 I

Glasgow l Edinburgh l Aberdeen October/November 2011 - Issue 1 - Innovator Scotland

Welcome

It’s a people thing W

hen we chose the title Innovator Scotland for this new magazine, the thinking was simple:

them. p6 We spoke to the man who will launch the first made-in-Scotland satellite p10 and interviewed the Chief Scientific Advisor for Scotland. p14

Not innovation – a thing – but innovator – a person.

How creative are you? Is creativity something you can develop – like muscles? p22 How can a 200-yearold legal firm become an innovative company fit for the 21st century? p38 Should innovators partner with big corporations or go it alone? p56 What happened to Ralf Klinnert after he braved Dragons’ Den? p16

And every issue of the magazine in future will revolve around people – the people behind innovation and what makes them tick. “Who inspired you? Where do you get your ideas? Who helped you? What about finance? How did you win your first customer? What lessons have you learned along the way?” These are just some of the questions we’ll ask.

Who inspires you?

How creative are you?

Are you an innovator?

Page 6

Page 22

Pages 1-64

In Issue 1, we’ve set out to answer a few of those questions by talking to people in a wide range of sectors – from outer space to cyberspace, and food & drink p24 to biotechnology p34 – in different types of companies and organisations, of all shapes and sizes. And we’ve tried to cover everything from the power of branding p37 to the power of dreams, the “adventure of the future” to the birth of television, and the idea for a “People’s Bank” to the secrets of angel investment. p32 We asked 20 people – investors and comedians, musicians and researchers, lawyers and scientists, inventors and entrepreneurs – to name the innovators who inspire

On other pages: The scientists behind a new kind of fabric which integrates photovoltaics. p26 The father-and-son team making waves in renewables. p19 How a thermal imaging company plans to expand via its franchise network. p42 James Fleck explodes the eureka myth. p46 Malcolm Baird argues that his father John Logie Baird was an innovator, not just an inventor. p48 Scotland’s social network sites promise to conquer the world p52 and Mel Young tries to change the world. p64 As well as telling the “story behind the story,” we also hope the magazine gets people talking – not just to each other but also to us. Our mission is to be “the voice of innovators,” so please let us know what you think of the new publication and contact us with your ideas and stories. Welcome to the first issue of Innovator Scotland. It’s for you. Peter Barr (Editor) editor@innovatorscotland.com

Everything we publish must pass the test: Will it help innovators?

Innovator Scotland - Issue 1 - October/November 2011

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06 10 14 16 19 22 26 32 34 38

My inspiration: Scotland’s innovators tell us who inspired them and why.

The Scottish space industry is set for lift off. We talk to the man who is leading the way. Anne Glover, Chief Scientific Advisor for Scotland, on how we can invent the future.

PICTURE: GRAHAM HUNTER

Contents 14

Life after Dragons’ Den for Ralf Klinnert and his Funky Moves. How the dream of low-cost wave power is becoming reality. Is creativity something we can all develop like muscles?

The company that puts the power in power dressing.

A leading angel investor explains why his work is much more than a wing and a prayer.

Scientist and entrepreneur Andy Porter proves there’s no business like biobusiness. Linda Urquhart, chair of Morton Fraser and the CBI, reveals how to stay ahead in the legal world.

Commercial partner:

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Editor:

Contributors:

Peter Barr

Malcolm Baird

Mark Batey

Andrew Glidden

Son and biographer of Scottish inventor John Logie Baird

Joint Chair of the Psychometrics at Work Research Group at Manchester Business School

Creative Managing Director of Glidden Design Ltd

October/November 2011 - Issue 1 - Innovator Scotland

Innovator Scotland - October/November 2011

42 46 48 52

Why thermal imaging is the new hot property.

James Fleck, professor of innovation, destroys the Eureka myth.

John Logie Baird - much more than just an inventor. The rise and rise of Scotland’s social network gurus.

Regulars

24 37 56

Q&A – Michelin Star winning chef Tom Kitchin.

Talking point – Mel Young on social innovation.

Insight – Andrew Glidden on the power of branding.

Insight – Alisdair Gunn on partnership vs do-it-yourself.

Innovator’s Digest

58 59 60 61 62

Universities and business The University of Edinburgh Knowledge Transfer Networks Biofuel Business Programme Chambers of Commerce

Writers: Jim Gilchrist Edinburgh-based freelance writer and ex-Scotsman features & arts writer

Alisdair Gunn

Mel Young

Bill Magee

Senior Innovation Manager at Innovation Centres Scotland

President of the Homeless World Cup

Scottish Technology Journalist of the Year

Innovator Scotland - Issue 1 - October/November 2011

er r Off to e d a Re ase turn Ple

page

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www.pwc.co.uk/scotland

Building relationships. Creating value.

Our ambition is to deliver real value for our clients. And we know that value means different things to different people. That’s why we’ll work with you to understand what’s important to you. Find out more about us at www.pwc.co.uk/scotland © 2011 PricewaterhouseCoopers LLP. All rights reserved. “PwC” refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom), which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

Issue 1 October/November 2011 www.innovatorscotland.com Editor Peter Barr peter@innovatorscotland.com Contributors Alasdair Gunn, Andrew Glidden, Bill Magee, Jim Gilchrist, Malcolm Baird, Mark Batey, Maria Barr, Mel Young Art Director Neil Custard (Glidden Design) neil@gliddendesign.com Brand Development Consultant Andy Glidden (Glidden Design) andy@gliddendesign.com Publisher Innovator Publishing Limited Carnegie Business & Conference Centre Halbeath Road Dunfermline KY11 8DY Scotland info@innovatorscotland.com www.innovatorscotland.com Commercial Director Advertising Sales & Distribution David Hughes 07789 397 526 david@innovatorscotland.com Publishing Director Editorial, Partnerships & Finance Barry Shafe 07767 427 554 barry@innovatorscotland.com Distribution Innovator Scotland is published bi-monthly. 10,000 copies per edition are distributed by combination of mail to named individuals and at various pickup locations throughout Scotland and carefully selected venues globally. Subscriptions Innovator Scotland can be posted direct to you for an annual subscription fee of £14.99 (UK only). Simply enclose a cheque made payable to Innovator Publishing Limited and post to the address at the top of this column with a note of your name and address. © Innovator Publishing Ltd. All rights reserved. Reproduction in whole or in part without written permission is strictly prohibited. Innovator Scotland magazine cannot be responsible for unsolicited material. The views and opinions by contributors in this magazine may not represent the views of the publishers. Innovator Scotland magazine takes no responsibility for claims made by advertisements in this publication.

Innovator Scotland - Issue 1 - October/November 2011

Meet the Publishers Welcome to the first issue of Innovator Scotland. We hope you enjoy it. We conceived the new magazine nearly 12 months ago and it started to become more than a vision when Peter Barr joined us as Editor earlier this year. Ideas need time to breathe and come alive and we are delighted with progress so far. There is a phenomenal amount of innovation happening across Scotland and we’re not going to belittle the scale and diversity by giving a handful of examples. Innovative, market-leading companies of all sizes call Scotland home. Our universities publish 10 times as much top-quality research versus the global average and lead in numerous disciplines. We have 3 goals for Innovator Scotland and we would like to share them with you. After all, you, the reader, will decide. 1. To celebrate innovation and portray the people who make it happen, the innovators, across all business sectors and technology or application domains. To help everyone to find inspiration and the courage to voice their ideas, tackle problems creatively and seize opportunities for themselves or their organisation. 2. To provide a medium for anyone and everyone to enjoy finding out more about the research discoveries emerging from academic research, the support available to business from universities and colleges and the diversity of networks who set the scene for serendipity and ground-breaking connections to be made. 3. To establish an independent and sustainable commercial operation that will continue to deliver on the first two goals. To achieve this we will provide an excellent, relevant and popular magazine that offers audience reach to business managers, professionals, researchers and other knowledge-workers across the breadth of Scotland’s innovative business, scientific and technology community. Innovator Scotland is for you. So, if you have any suggestions or wishes, or want to discuss how we can work together, please get in touch. Barry Shafe barry@innovatorscotland.com

David Hughes david@innovatorscotland.com

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My inspiration Scientists, inventors and entrepreneurs rub shoulders with musicians and comedians as innovation icons.

nnovation comes from every direction and changes the world in an infinite number of ways. But no matter whether innovation starts in the lab, the garage or boardroom, and transforms business, science or technology, our quality of life or the environment, what innovators have in common is the source of their ideas – inspiration. Inspiration is not only the eureka moment somewhere deep inside the mind but the example set by inspirational people – the giants whose shoulders we stand on.

But perhaps it is now time for more people in Scotland to be innovators – and inspire others as they were inspired. For this first issue, we asked a number of people in Scotland – investors and comedians, musicians and researchers, lawyers and scientists, inventors and entrepreneurs – to name the innovators who inspire them. The answers range from Alexander the Great to Ann Gloag of Stagecoach, but perhaps their choices say more about them than the people they choose...

Perhaps in Scotland more than many other countries we tend not to blow our own trumpets and frown upon people who do.

Sir Philip Cohen (University of Dundee): CHARLES DARWIN By introducing the concept that life evolved by natural selection, now amply proven by experimentation, Darwin overturned thousands of years of dogma and changed forever our understanding of life and the position of man in the universe. He ushered in a new era in which rational decisions made on the basis of the evidence replaced irrational beliefs. ____

Mike Antlifff (Kabu): STEVE JOBS For the succession of strong Apple products and his commitment to innovation. _____

Professor John Wilson (Power Textiles Ltd): DAVID MILNE The founder of Wolfson Microelectronics and CBI Entrepreneur of the Year (2006), who developed highly innovative technology, including key components for Apple, Sony and Microsoft, and built an international business based in Edinburgh. ____

Ralf Klinnert (Funky Moves): RICHARD BRANSON & JAMES DYSON Apart from a family member (who started a successful software engineering firm), it has to be Branson for his get-up-and-go attitude and Dyson for his persistence after having been knocked back so many times, and for his creative designs.

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Professor Angus Lamond (University of Dundee): LOUIS PASTEUR In life sciences, I have no hesitation in choosing the great French chemist and microbiologist (what we would now call a biochemist or molecular biologist). He epitomises an outstanding research scientist whose fundamental discoveries open up new fields and new basic understanding of life, but also have profound practical applications that benefit mankind. His contributions to understanding the germ theory of infectious disease, his development of practical methods for making liquids safe to drink – Pasteurisation – and his creation of the first vaccines to treat rabies and anthrax, are all examples of what we now term “Translational Research” at its very best. ____

Professor Andy Porter (University of Aberdeen and Grampian Biopartners): ALEXANDER THE GREAT When I was young, because of his military tactics and innovative approach to military campaigns. As I got older, because of his skills as a politician and logistics expert. And now, although I realise he was probably not very nice to be around, I am drawn to a man who did so much at such an early age. Where did that drive, energy and ruthless ambition come from? How much charisma is required to hold an army together for years and lead them around the known world? ____

Linda Urquhart (Chair of Morton Fraser & CBI Scotland): ELSIE INGLIS Not just an innovator in medicine, she set up her own medical school, became involved in politics because she

October/November 2011 - Issue 1 - Innovator Scotland

08 saw that as the way to improve the standard of medical care offered to women and also set up the Scottish Women’s Hospitals for Foreign Service Committee which ran women-only staffed hospitals for the Allied war effort. ____

Greg McHugh (Actor, comedian & writer of Gary Tank Commander): BILLY CONNOLLY If I had to choose someone who changed my way of thinking with their innovative approach it would have to be Connolly. I can remember watching him on TV as a child and laughing uncontrollably, not sure why this odd-looking man was so funny, why his turn of phrase was so perfect, and why the physical elements went so well with the words. He changed comedy through his innovation and inspired me to get involved in comedy. ____

Robert Bruce (business consultant): PROFESSOR IAN DONALD (UNIVERSITY OF GLASGOW) He pioneered the use of diagnostic ultrasound and first tested it in 1958. ____

Gordon Peterkin (healthcare consultant & former director of the Scottish Centre for Telehealth): RICHARD P. FEYNMAN He was Nobel Prize winner in physics in 1965, the year I left school and started studying medicine. He was not only an innovator in nuclear physics but an artist, safe

Innovator Scotland - Issue 1 - October/November 2011

PICTURE: LEV RADIN / SHUTTERSTOCK.COM

cracker, drummer and a child prodigy radio mechanic (age 11). Hans Bethe, another Nobel Laureate, said: “There are two types of geniuses. Ordinary ones do great things, but they leave you room to believe that you could do the same if only you worked hard enough. Then there are magicians, and you can have no idea how they do it.“ Feynman was a magician.

Darwin overturned thousands of years of dogma and changed our understanding of life. SIR PHILIP COHEN

Stewart Little (IRT Surveys): VALENTINO ROSSI, CHRIS CORNELL & WILLIAM HERSCHEL My heroes? Valentino Rossi (motorbiking god) Chris Cornell (rock god) and William Herschel (science god), the astronomer who discovered Uranus and infrared radiation – and composed 24 symphonies. ____

Arlene Campbell (patent attorney): ANN GLOAG Apart from the ‘inventor of the year’ Tanya Ewing, who is one of my clients, my ‘innovation icon’ is the co-founder of Stagecoach, Ann Gloag. She rolled up her sleeves and got on with it. I think that’s very liberating. Gloag co-founded “Gloagtrotter” in 1980, using £25,000 of her father’s severance money to purchase two buses.

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17 In the early days of its Dundee-London route, she and her mother served sandwiches and tea and provided blankets. These days she devotes a lot of her time to charity work. ____

Tom Kitchin (chef): ALAIN DUCASSE I spent some time in my 20s working for him. At the time he was pioneering a la minute – cooking dishes entirely from scratch, using only the finest, local and seasonal ingredients. As soon as the order is taken, chefs prepare every ingredient there and then, from peeling and chopping each vegetable to butchering meat. This is one of the most challenging ways to cook. But if you can cook at this level it adds to the excitement – and the result is outstanding.

Miles Davis used his limitations to his advantage, inventing new forms to suit his playing style. MICK COOKE

Brian Hughes (Kiltr): JOHANNES GUTENBERG His invention of mechanical movable type printing started the Printing Revolution, widely regarded as the most important development of the modern age. “Since web 2.0 blurs the line between content publishers and content users, he seems pretty appropriate to me.” ____

Mick Cooke (musician, composer and member of Belle and Sebastian): MILES DAVIS Because of his constant reinvention of jazz. He used his limitations to his advantage too, inventing new forms to suit his playing style. ____

and science ever since. ‘Jezza Bezza’ is also an icon in a literal sense – a wax auto-icon of him sits in a glass case in the college. ____

Anne Glover (Chief Scientific Advisor for Scotland) JAMES WATT, JAMES HUTTON, SIR JAMES BLACK & STEPHEN SALTER Watt translated knowledge into engineering, revolutionising industrial processes and how machinery works. Hutton changed the established view of the world and used evidence to demonstrate the planet was more than 6,000 years old, using the scientific method to ‘think out of the box.’ Black is “a delightful and enthusiastic man” whose innovation (beta blockers) has saved lives. “We should treasure people like Stephen Salter,” for his innovations in renewable energy. ____

David Campbell (AlbaTERN): HENRY T FORD He focused on his specialism in the motor car and let others worry about the roads. There are too many distractions around to push you off track in innovation. Persistence and focus and attention to detail are virtues. ____

Malcolm Baird (son and biographer of John Logie Baird): LORD KELVIN He is my innovation icon because his life shows how basic academic research and practical innovation can complement each other. His inventions included the first practical recorder for telegraph signals and he was involved in the laying of the first telegraph cable across the Atlantic, in 1865 – and his name lives on in the Kelvin absolute temperature scale. ____

David Findlay (AlbaTERN): STEPHEN SALTER For me this is an easy one – the inventor of the Duck and Edinburgh University Professor Stephen Salter. I had the good fortune to work for Stephen early in my career and I can honestly say that I probably wouldn’t be an engineer today if not for him. I’m not the only one to go on record saying that, either.

Deborah O’Neil (Chief Executive, NovaBiotics): JEREMY BENTHAM The founder of my alma mater, ‘That Godless place on Gower Street,’ University College London. Why? In addition to his vision of creating a university where access wasn’t down to class, sex or religion, he drove the movement of ‘donating’ your mortal remains for the advancement of science by giving his own body over for medical research. Practising what you preach is always key to making a difference, and he has impacted advances in medicine

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We should treasure people like Stephen Salter. ANNE GLOVER

October/November 2011 - Issue 1 - Innovator Scotland

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Out of this world Scotland enters the space race

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October/November 2011 - Issue 1 - Innovator Scotland

The next time you gaze at the heavens above, a tiny part of Scotland will be orbiting the planet above you – part of a satellite made in Glasgow by a company called Clyde Space... By PETER BARR

raig Clark has had an ambition for years – to launch Scotland’s first satellite. As a child, he had a healthy interest in space, but nothing extraordinary. As a student in Glasgow, he never imagined he’d work in the space industry. Before he left his last job as an engineer at one of the UK’s leading small-satellite companies, it had never even occurred to him to start his own business. Six years later, Clark is managing director of Scotland’s largest space technology company and supplier of more power systems for satellites than any other company on Earth. And next year Clyde Space will put the first made-in-Scotland satellite up into space. Even though he may be aiming higher than most Scottish entrepreneurs, Clark has his feet firmly set on the ground when it comes to describing the story so far. The 37-year-old businessman studied power engineering at the University of Glasgow and when he graduated in 1994, he could have gone in several directions. After firing off dozens of job applications, he got a job as a power systems engineer at SSTL (Surrey Satellite Technology Ltd) in England, one of the first companies in the world to pioneer small satellites – at that time made from similar components to TVs. The company was then just 30 people (today it has about 300 employees) and the more established countries in the space industry were still sceptical about the future of small satellites. As a result, most of the company’s business was with the emerging economies, and Clark’s first job was a project for the Chilean Air Force. He also gained experience in mission design, spacecraft testing, on-orbit operations and management.

I wanted to be taken as a serious player and that meant a quality brand and good presentation. CRAIG CLARK Clark was thrown in at the deep end soon after when he found himself speaking at an industry conference. “I was only 25,” he explains, “but I’d already worked on eight missions, while most people worked on one mission every 10 years.” In 11 years at SSTL, Clark worked on a total of 25 missions and became a specialist in power solutions, but Scotland was calling him home...

When he decided to leave SSTL and move his young family to Glasgow, one of his ex-colleagues asked Clark if he was planning to set up his own company. Clark says he had never even thought about it until then and asked himself: “Am I the type to do that?” Clark was not only the right type of person but set up Clyde Space as soon as he went back to Scotland, and headed straight out to Japan to a space industry conference. SSTL made complete satellites, not just sub-systems, and armed with the licenses for the technology he had developed in England, Clark immediately started promoting his company’s power solutions, convinced there was a niche in the market. Although he did not have a business background, Clark knew that he had to develop the company brand from the very beginning, including the creation of a highly professional web site which gave the impression that Clyde Space was a lot more than the sum of its parts. “I wanted to be taken as a serious player,” says Clark, “even though I was the only employee. And that meant a quality brand and good presentation.” The company name was another strategic decision. “I wanted the name to reflect the area where we were based,” he explains, referring to the company web site, which says: “In the past, 25 per cent of all of the world’s ships were made on the River Clyde. In the future, perhaps the Clyde will be equally successful building spaceships.” Clark also instinctively knew that he shouldn’t get bogged down in details: “No serious entrepreneur should be focused on filling in VAT returns.” Apart from new technology, his focus was developing the business and sales, and soon after he returned from Japan, he won a SMART award from Scottish Enterprise, backed up by funding from a number of private investors, to develop power systems for a new generation of CubeSats – tiny satellites which measure just 10x10x18cm and weigh about 5kg. “I hadn’t heard about CubeSats before my trip to Japan,” says Clark, “but I recognised it as a great opportunity.” For Scottish Enterprise, space was a new market frontier, but the organisation not only provided some much-needed money but also good advice on marketing and business development – what Clark describes as “nuggets of good information.” CubeSats were also new to Scottish Enterprise – as well as many people in the space industry itself. “Some people told me I’d never make money in CubeSats,” says Clark. “Some people still don’t get it – but I’m glad they don’t because that means more opportunities for us.”

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The best way to market space products is through their successful demonstration in orbit. CRAIG CLARK

PICTURE: IAIN MCLEAN

Above: Craig Clark had never thought of running his own business before he set up Clyde Space six years ago.

A US firm called Pumpkin which sells CubeSat kits was the first to see the commercial potential of the new technology, and Clyde Space is now making Scotland a serious player in the miniature satellite sector. The business journey so far has had its ups and downs for the young Glasgow company, which grew to six people in 2007 and now has 24 staff. It won its first customer in 2006, supplying two solar panels for South Africa’s SumbandilaSat mission. “They phoned us up and asked if we could do it in four weeks,” says Clark, “and even though we knew it would usually take about six months, we said ‘Yes!’ – and we delivered it on time.” At that time, Clark had just hired his first employee, Andrew Strain, who asked him, as they rushed to meet the deadline, “Will it always be like this?” And once again, Clark answered: “Yes!”

In Scotland, we can’t compete with the big guys but there is an opportunity to do something different. CRAIG CLARK This was soon followed by orders from Malaysia, Japan and the US, but it was not until 2008 that the company got any business in Europe, and another year or two before it got its first customer in the UK. Today, its client list includes the European Space Agency, NASA and the US Air Force, as well as customers in Turkey, South Africa, India, China, South America and Canada, and it has about 30-40 per cent market share of the global CubeSat power market. The company has also supplied over 160 power

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systems for small satellites, making it the world’s biggest supplier of this kind of power solution – admittedly, much smaller versions. Early this year, these successes led to a major investment when Clyde Space secured a funding package worth £1 million. This included equity investment, led by private equity firm Nevis Capital, with funding from Coralinn LLP, Scottish Enterprise, the Science and Technology Facilities Council (STFC), the Technology Strategy Board and Regional Selective Assistance, “to support innovation and growth across all company activities” as well as “to expand its product range and capability offering and increase its global market share.” Lena Wilson, chief executive of Scottish Enterprise, said at the time: “Clyde Space is a great example of a forwardthinking company that is successfully tackling the global marketplace and boosting the Scottish economy.” So far, the money has enabled Clyde Space to build a new 1,000-square-foot clean room and install new automatic testing equipment. Clark is not only proud of what he has achieved so far at Clyde Space, “the largest space company in Scotland,” but also keen to promote his own country – and to put Scotland up into space. “In Scotland, we can’t compete with the big guys like NASA but there is an opportunity to do something different and develop the space business here,” he explains. Clark’s dream of a made-in-Scotland satellite is starting to get closer to reality, and this is just the start of something much bigger in Scotland, he says. Politicians, academics and people in business are beginning to see that the space sector has strong strategic potential for Scotland, because it ticks all the right boxes: an exportdriven, high-tech industry which could create thousands of jobs.

October/November 2011 - Issue 1 - Innovator Scotland

The secret is out there... “The success and prosperity of the UK’s and Scotland’s space industry is probably one of our best-kept national secrets.” Dr Malcolm Macdonald (Advanced Space Concepts Laboratory, University of Strathclyde) Space technology could be the next big thing in Scottish industry, generating £5 billion a year in exports and creating 10,000 jobs, according to Craig Clark of Clyde Space.

The Institute for Gravitational Research at the University of Glasgow is involved in a project called LISA (Laser Interferometer Space Antenna), using spacecraft fitted with lasers to detect gravitational waves from giant Black Holes.

The space industry is already worth an estimated £7.5 billion a year to UK companies and is growing at an annual rate of 10 per cent, with Scotland playing an increasingly important role in research and development. The global industry is also tipped to grow from £160 billion in 2008 to £400 billion by 2030.

STAR-Dundee – an engineering design company that specialises in spacecraft electronics and related test and development equipment. In particular, the company supports users and developers of SpaceWire, a standard for data communications onboard satellites and spacecraft. SpaceWire is being used on ESA, NASA and JAXA spacecraft as well as many agencies and research organisations worldwide – e.g. the Lunar Reconnaissance Orbiter is charting the surface of the Moon with the help of SpaceWire systems.

Scottish organisations in the sector include: Astronomers from the Universities of St Andrews and Edinburgh are involved in the hunt for extra-solar planets similar to the Earth, working with other researchers worldwide to build and use an instrument to analyse the light of candidates identified from NASA’s Kepler space probe.

The UK Space Agency estimates that the industry could be worth £40 billion to UK companies by 2030 and create 100,000 jobs, so if Scotland gets its sums right, that means a potential £5 billion a year and up to 10,000 jobs. Some sceptics may claim this is over-ambitious, but Clark believes we have to be more positive in Scotland.

Clyde Space has supplied over 160 power systems for small satellites – more than any other supplier. The Scottish space sector today is only worth an estimated £20 million a year but Clark thinks we have the potential to grow very rapidly, taking advantage of the skills we already have and the graduates coming on stream in subjects like astronomy, physics, electronics and engineering. “It would be easy to say we will never be able to do that,” says Clark, “but I think we should ask ourselves what we could and what we should be doing, and just get on with it.” As well as promoting Scotland’s space industry, Clark now sits on the UK Space Leadership Council, helping to develop a strategy for growth. Interest in small satellites is growing, and the UK Space Agency is also supporting an initiative to launch the UK’s first CubeSat, made in Scotland by Clyde Space. Two years ago, Clyde Space entered a Knowledge Transfer Partnership with the University of Strathclyde. “Normally,” says Clark, “this only happens with much larger companies, but we’ve proved we can do it.” Meanwhile, the CubeSat Research Network produced a report to explore the possibility of launching a UK-built CubeSat, and Clyde Space came forward to take up the challenge, in partnership with the Advanced Space Concepts Laboratory at Strathclyde.

Innovator Scotland - Issue 1 - October/November 2011

The UK Astronomy Technology Centre in Edinburgh designs and builds instruments for many of the world’s major telescopes, and is also involved in research to find out more about the origins of galaxies.

UKube-1 will allow the UK to test new space technologies and carry out new space research more cost-effectively and quickly, “making up in innovation what they lack in size.” It will also carry experiments selected from a competition open to companies and academics to come up with the most innovative ideas for payloads. The winning payloads include the first GPS device aimed at measuring plasmaspheric space weather; a camera that will take images of the Earth and test the effect of radiation on space hardware, using a new generation of imaging sensor; an experiment to demonstrate the feasibility of using cosmic radiation to improve the security of communications satellites and to flight test lower cost electronic systems; and five experiments that UK students and the public will be able to interact with. As well as being part of a project that promotes the new miniature satellites and inspires young people to get interested in science, Clyde Space has effectively become its own customer, developing a CubeSat all of its own. “We have the freedom to build exactly what we want rather than a custom-built solution,” says David Castle, who’s in charge of manufacturing at Clyde Space. “The best way to market space products is through their successful demonstration in orbit,” says Clark, referring to UKube-1. But outer space is not the only place Clark’s company markets its products. You can buy your own CubeSat or CubeSat components at the company’s new online Space Shop (www.clyde-space.com/cubesat_shop), the first of its kind in the world. As it says on the web site, “Add your chosen satellite or satellite subsystem to your basket and buy with your credit card.” Instead of counting down from 10, simply enter your 3-digit code, and you too could enter the space race – with Craig Clark and Clyde Space.

NEXT ISSUE: Inside the Advanced Space Concepts Laboratory at the University of Strathclyde.

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Interview

Anne Glover

The adventure of the future By PETER BARR

f innovation was safe, everyone would do it, says Anne Glover, the Chief Scientific Advisor for Scotland. “And if everyone knew how exciting it was, they would all want to do it.” Glover, who will step down from her current role and return full-time to her work at the University of Aberdeen before the end of the year, is keen to trumpet Scotland’s scientific achievements but she also sounds a note of caution when it comes to commercialisation. “We produce unparalleled knowledge,” she says, “but do we translate this into unparalleled innovation? Probably not...” Innovation can mean different things to different people, but Glover admires it when she sees it in people around her. “The best scientists are people who never lose their sense of curiosity,” she says. “And that is the basis of innovation – making connections that are not obvious.” For Glover, innovation also permeates everyday life and “how people approach their jobs.” She cites examples such as corner shops which think up innovative promotions and a mechanic fixing an engine with limited resources by “doing things differently.” Sometimes, the connections which may lead to innovations are the meetings of minds and the “cross-fertilisation” of ideas. For example, she quotes the example of Brinker, an Aberdeen company which developed a new way to seal leaks in pipelines. The “eureka” moment came in 1998 when Dr Ian McEwan cut his finger and started thinking about how the blood clots – how platelets patrol our veins and seal wounds – and today the company’s Platelet technology is being used to locate and seal leaks in oil & gas wells and pipelines, using polymers stronger than steel. Tiny particles patrolling a pipeline reminds Glover of her own “eureka” moment as an eight-year-old. Her teenage brother may have been more interested in watching Raquel

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Welch but The Fantastic Voyage stimulated Glover very differently – the science-fiction film inspired her to go on to be a scientist. “The idea you could be miniaturised and travel round inside a human body to cure a disease was truly fantastic,” says Glover. Science fiction sometimes becomes science fact – and even more fantastic than writers imagine, with nanobots now being built which make the film seem quite old-fashioned. Another “old-fashioned” idea which Glover has sought to address since being appointed the Chief Scientific Advisor in 2006 is the image of the scientist in the white coat – an image which she herself clearly avoids. What gets her most excited as a scientist is the adventure of science – and what she fights against is anything which tries to restrain this. “Innovation invariably involves an element of risk,” she explains, “but we live in an increasingly risk-averse society which sometimes has a stranglehold on innovation. We shouldn’t be scared to expose our young people to risks as long as we provide them with the tools to deal with it. We have to give them time to explore the what-if possibilities.” Glover is also a big fan of Scottish achievements in science: “We should be hugely proud of the impact of Scottish research, particularly in agriculture, space and pharmaceuticals, where we are number one in the world in terms of average citations per paper. There is something extraordinary about the intensity of the ideas we generate.” As examples, Glover points to the UK Astronomy Technology Centre in Edinburgh and the Institute for Gravitational Research at the University of Glasgow which is involved in worldclass projects such as LISA (Laser Interferometer Space Antenna), using a triangular array of spacecraft fitted with lasers, five million kilometres apart, to detect gravitational waves from giant Black Holes and provide

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Saltire Prize makes waves The prize is worth £10 million and is an international challenge “to encourage revolutionary commercial breakthroughs in wave and tidal energy,” as part of Scotland’s strategy to attract significant private investment and “confirm Scotland’s ambition to become the leading force in clean, green, marine energy.” The money will go to the team that best demonstrates commercially viable wave or tidal stream energy in Scottish water, achieving a minimum electrical output of 100GWh over a two-year period, and so far, the challenge has attracted over 150 expressions of interest from more than 30 countries. According to the Chief Scientific Advisor for Scotland, Anne Glover, “we would be hard-pressed to find another government supporting such a challenge – in the process bringing big business to Scotland.” As a reminder of Scotland’s already substantial achievements in marine energy, Professor Stephen Salter was recently presented with the inaugural Saltire Prize Medal, to recognise his role in the development of ‘Salter’s Duck’, which pioneered the use of waves to generate power, developed at the University of Edinburgh in the early 1970s. Accepting the award, Professor Salter said: “I am very proud of what we achieved. Many of our ideas are now being applied to other renewable energy sources. Our only mistake was doing it too early – but that is better than too late.”

new insights into the birth of the cosmos. “For me,” says Glover, “this is an outstanding example of the world-class research being carried out in Scotland today.” Glover also refers to the extraordinary number of Scots leading projects at CERN (the European Organisation for Nuclear Research), which is using particle accelerators and detectors to understand the basics of matter by studying what happens when particles collide – to “simulate” the so-called Big Bang and confirm the existence of an elementary particle called the Higgs boson, first predicted by the physicist Peter Higgs of the University of Edinburgh. Energy is another strong sector for Scotland, says Glover. “In the oil industry, we have an excellent track record when it comes to full-scale production in a hostile environment, and now we have the opportunity to use this legacy for carbon capture and storage (CCS).” And renewables are now beginning to take centre stage, with companies like Pelamis leading the way. Glover recently visited a test site in Orkney where the company was testing one of its wave-powered devices, doing what she describes as “breathtaking” work when it comes to problem-solving in engineering. Made-in-Scotland textiles are another very promising area – for example, plasma printing, clothes that change colour, using cloth for new applications including clean power, and self-cleaning textiles which would save a lot of energy and water.

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To translate great ideas into profitable businesses needs significant funding, and Glover mentions the idea of a “People’s Bank” for everyone in Scotland to contribute to the drive for innovation. For young companies to flourish internationally, we need to put our money where our mouth is, but Glover believes that the problem is not just lack of money. The bottleneck is how to translate the value of knowledge into the economy, as well as the environment and quality of life. The economic benefits of innovation often go beyond the obvious. For example, Optos has developed a technology for early diagnosis of visual impairments which means not just a better life for everyone affected but cuts costs for the health service over the long term. From the consumer point of view, investment “to support the innovation landscape” is therefore essential. “We have to persuade people there is an advantage,” says Glover. “We need strong partnerships to identify the benefits for everyone.” Raising £50,000 for start-ups or spin-outs can be relatively easy and Scotland generally does well at this stage, says Glover, but stepping up to £5-10 million is a much bigger challenge. A People’s Bank may therefore have a role to play, getting more Scots directly involved in getting ideas off the ground, perhaps focusing on one or two sectors with proven track records.

When she steps down as Advisor, Glover will return to her post as Chair in Molecular & Cell Biology in Aberdeen, one of 20 “crucibles of learning” which she believes punch well above their weight in international terms and are also very welcoming to leading academics from countries all over the world, especially when it comes to setting up networks and pooling research. Her role as Scotland’s first Chief Scientific Advisor has been a great challenge and she now thinks it is hard to imagine not having one. The core objectives are to make sure that government policies are based on evidence and identify where more research is needed, but attitudes to science are also important. Over the last five years, Glover thinks science and engineering have become more visible in Scotland among the general public and politicians. One recent scheme invited people to “do something creative, do science,” and Glover thinks science should be in the “cultural blender” along with the arts, so more of us can “let our imaginations run riot.” Glover is proud of what Scotland has done in the past and also optimistic. “We did invent the modern world,” says Glover, referring to the book which first staked the claim. “In the 18th century, our philosophers, scientists and engineers made a huge contribution, and in the 21st century, we are also inventing the future.”

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After Dragons’ Den

Funky Moves moves on... In the first of a series on Scottish businesses who braved the hit TV show Dragons’ Den, we look at Funky Moves and its electronic exercise product... Even though she actually defended the concept of government funding because it helped commercialise ideas, Deborah Meaden said the figures didn’t add up and quickly declared she was out, while James Caan described the game as “four cones with lights on” and said Klinnert must think the Dragons were “mad” to value his company at £600,000. Three Dragons down. Two to go. Even Theo Paphitis, who along with Peter Jones offered to invest £120,000 for 50 per cent of the equity in Funky Moves, thought at one stage that Klinnert was “nuts.” But the “mad inventor” did get what he asked for – and two Dragons into the bargain.

By PETER BARR

PROPOSITION: £120,000 FOR 20 PER CENT OF THE EQUITY The Pitch t didn’t start well and it soon got even worse. When Ralf Klinnert finished his three-minute pitch and invited the Dragons to play Funky Cones, his electronic physical activity game, all of them stayed firmly glued to their seats and tight-lipped Scottish Dragon Duncan Bannatyne simply said: “No!”

As presenter Evan Jones said, it was “an awkward end to a business-like pitch,” and Klinnert’s dream of raising the money to mass-produce his prototype game had become his worst nightmare... Bannatyne then told Klinnert that “only a complete idiot” would invest in his “ridiculous” idea and tore into the German-born entrepreneur, telling him that he was sick and tired of seeing taxpayer’s money spent on “worthless business ventures” like this. Two other Dragons also said the tooling costs for the new product were “ridiculous” and suggested they should only be a fraction of the £70,000 Klinnert said would be needed. Klinnert – who is managing director of Funky Moves, the company he founded to develop the game – defended the figures but seemed to be losing the battle. He had primary schools and sports clubs queuing up to buy his product but the 15 sets made so far had already been sold and he needed more money to start mass production and develop new markets.

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So why did Paphitis and Jones buy the idea? Jones thought it had “huge, huge potential, on a global scale.” Paphitis agreed and emphasised the need to get the costs down. Current costs were £480 per unit (retailing for £950) and Klinnert said this could be lowered to £175 or less as volumes increased to 1,000 units. Paphitis still thought this was high and said the business model still needed tweaking, but Klinnert’s “revelation” worked its magic. When the two Dragons laid down their offer, Klinnert asked them both if they were willing to negotiate, but of course they refused – telling him later that a large chunk of something successful was better than a larger share of something going nowhere. “If it fails, we’ve all lost money.” “Every time I see cones,” Jones said afterwards, describing his enthusiasm for the new product, “I’ll smile.” If Klinnert hadn’t accepted the offer, Jones also said his electronic cones would simply join the thousands of other annoying cones we see on the road every day. “What a great deal!” said Paphitis.

RESULT: £120,000 FOR 50 PER CENT OF THE EQUITY – PETER JONES + THEO PAPHITIS 12 months later... Klinnert sits in his office in the Alba Innovation Centre in Livingston and describes what happened next – 12 months after entering the Dragons’ Den and five years after founding Funky Moves. Theo Paphitis has assigned a member of his team to advise the 41-year-old entrepreneur and inventor, but Klinnert explains: “Don’t expect the Dragons to turn up on Monday morning.” The first step after Dragons’ Den was doing due diligence to confirm that everything Klinnert had told his investors was

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true. Something almost always emerges from a process like this, and it was not until September last year, following filming in April, that Klinnert sat down with the Dragons again to discuss their next (funky) moves. Jones and Paphitis strongly believed that the product had enormous consumer potential and also encouraged Klinnert to focus on the educational and professional sports markets first, to increase awareness and prove its appeal. Klinnert’s advisor also introduced him to a leading toy designer to redesign the product for the global toy market. The “morning-after” effect was dramatic, says Klinnert. The next day, he received hundreds of emails from schools, professional sports teams and potential distributors. “It was great PR,” says Klinnert, “regardless of the outcome.” The game has already received the thumbs up from a number of football teams in the UK and ice hockey teams in the US. The Scottish Institute of Sport has also done a study which confirms that it improves skills such as speed and agility as well as peripheral vision and cognitive skills. Funky Cones has also been identified as a great idea for corporate team-building sessions, healthcare applications and even equestrian sports, security forces and military training, helping to check fitness levels and track individual performance. Before he appeared on the show, Klinnert was interviewed over the phone for two hours and then did a screen test. Next, he prepared an executive summary of his business

Innovator Scotland - Issue 1 - October/November 2011

plan and polished his 3-minute pitch – and all of this has helped develop confidence and sharpen his skills. “Your pitch is important,” says Klinnert. “You’re telling a story about where you come from and where you are heading and what you need to get there.” Klinnert also thinks that passion is important, but even though he was nervous, waiting in the “Green Room,” not knowing who would be next up in front of the cameras, he enjoyed the whole experience.

Above: Ralf Klinnert has found some powerful support for Funky Moves after braving the Dragons’ Den.

“My main aim,” says Klinnert, “was not to win money but to go away with my proposition and my integrity intact.” The conflict over tooling costs was hard to deal with, but this was later ironed out and both Dragons now understand and are focused on making the game a success in the home. “When people see the game in action,” says Klinnert, “they come up with new applications that I’ve never thought of before. That is really motivating. It’s a relatively simple concept that gets people thinking. So I listen to my customers then modify the product and develop new games and new markets.” To get this far, Klinnert has travelled from his native Germany via Napier University and Stirling to the Alba Innovation Centre in Livingston, picking up along the way £150,000 in funding and investment. Klinnert has always been keen to start his own business, inspired by a family member who started a successful software engineering firm 20 years ago. He spent

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After Dragons’ Den Funky Moves has already been a hit with pupils in schools across Scotland.

a year at Napier in 1999 to finish his degree in electronic engineering – and settled here. During his last year at Napier, he started a project which he hoped would be the first step on the ladder to business success, developing a “wayfinder” solution for the visually impaired. His supervisor at Napier then encouraged Klinnert to apply to the Royal Society of Edinburgh (RSE) for an enterprise fellowship, but this proved to be a false start – the RSE turned down his application because it did not believe the idea had sufficient commercial potential. Not to be discouraged, Klinnert then embarked on a completely new project, inspired by an idea from his supervisor, Dr David Binnie, for an “interactive running game.” And in 2004, he won RSE backing (the equivalent of one year’s salary) and started on the road to Funky Moves by building his first demonstrator unit – what he himself describes as “four spray-painted parking cones, connected with cables.” (And no, although he was a student once,

he didn’t steal the cones.) The first potential customer to recognise the value of the product was Falkirk Council, which realised the game would be particularly useful in primary schools. Next step on Klinnert’s journey was the University of Stirling where his mentor Robbie Taylor helped him further develop the product and prepare to form a company, which finally opened for business in 2006. The financial support then took off with £50,000 for proof of concept from Scottish Enterprise’s SMART:Scotland fund in 2007, which helps individuals and SMEs to develop commercially viable projects. Scottish Enterprise has put in a total of £92,000, in addition to £55,000 from private investors. This support enabled Klinnert to develop the first prototype in 2008, when he moved to his new office in the Alba Innovation Centre in Livingston, enjoying rent-free space for the initial

The innovation: Funky Cones Funky Cones is an electronic physical activity game using coloured cones with lights on the top which can be controlled using a remote. In one game, you program the cones to light up in a random sequence, observe and remember the sequence, then run from cone to cone, tapping the top of each cone, in the same sequence. When you get it right, the cone beeps and if you get the sequence right, you hear a ‘happy tune’ at the end of the game and see how long you took.

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three months until he secured further backing. Klinnert is full of praise for everything the Centre has done, including his advisor Liza Sutherland, helping him with contracts, legal services and IP protection, financial modelling and his business plan. “Without them,” says Klinnert, “I would not have been able to do this.” What next? What Klinnert needs now is a further £200,000 to make 1,000 sets plus £150,000 to improve the product and develop sales and marketing channels. Interest is strong in the product in Europe, North America and the Middle East, but Klinnert needs to jump a few more hurdles to turn the innovation into serious dollars. Meanwhile, one of his potential distributors in the UK may become a major investor and interest has also emerged in the Asia-Pacific. Design is also getting a lot of attention as Funky Moves aims for the family market. Would Klinnert enter Dragons’ Den again? Of course he would... And Bannatyne? “Every day, as I drive past Bannatyne’s Health Club, I remember his rant and I smile,” he replies. “It inspires me to get on with business and prove him wrong.” Watch This Space: Innovator Scotland will provide regular updates on all of the companies featured. So look out for Funky Moves’ next move.

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The power of dreams

It started with a dream and now a company called AlbaTERN is set to prove its scalable wave-energy converter can cut the cost of power... By PETER BARR

Above: The AlbaTERN team (left to right): David Findlay (chief technical officer), John Lindsay (chief executive officer) and David Campbell (chief financial officer).

any engineers and scientists have dreamed for many years of capturing the power of the waves. In recent years, a number of technologies have started to emerge which promise to turn this dream into reality, developed in Scotland by companies such as Pelamis Wave Power and Aquamarine Power. The existing technologies tend to be relatively largescale devices, but when he was a student, working at the University of Edinburgh for Professor Stephen Salter (the inventor of the famous Salter Duck), David Findlay had a dream about a totally different solution – an array of spinning magnets in transparent perspex spheres. Early attempts to describe this design to the distinguished professor resulted in an explanation of why perpetual motion machines do not work, although Salter also went on to encourage Findlay by saying that he was “not in the business of killing fledgling ideas.” Even though Findlay is keen to point out that his current design is significantly different from the dream (the perspex vanished long ago, while the magnets became generators), when you look at the design drawings of WaveNET, the similarity remains – hexagonal arrays of wave absorbers

Innovator Scotland - Issue 1 - October/November 2011

joined together with link arms. But the big difference is that WaveNET is not just an idea but a real-world technology based on solid engineering principles that could have a major impact on renewables in Scotland and beyond. What makes WaveNET different is the scalable and modular design of the system, and the way it captures energy from waves in three dimensions: pitch, heave and roll. “Very few devices capture energy in more than one dimension,” says Findlay, “and virtually none do it in all three dimensions.” Renewables is gathering momentum, in terms of both investment and development, but marine energy in general and wave energy in particular still have much to prove. Wind turbines are a few years ahead, but many people believe that the sea holds the answer to much greater long-term returns, due to advantages like much more predictable sources of power, higher energy densities and greater availability of sea space. Interestingly, Findlay’s design has parallels with the deployment of offshore wind turbines and future demonstrator projects could see the WaveNET arrays providing shelter to offshore wind installations and cabling to the same substations.

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The AlbaTERN project started four years ago when Findlay and his father John set out to develop the WaveNET array. The first thing they discovered was that a hexagonal array offered huge advantages in terms of both strength and flexibility, compared to other geometries. “One major challenge was to balance efficiency and survivability,” says Findlay. “By positioning the absorbers just below the surface it means they avoid the violent slamming forces that floating vessels experience out at sea whilst at the same time capturing the maximum amount of power from the waves and ensuring greater survivability in extreme conditions.” The fact that WaveNET is designed in a completely different way to other wave-energy converters meant that Findlay had to be quick to protect it by applying for patents. AlbaTERN now has patents for three major concepts and components – to reassure investors and avoid imitation. The first application in 2007 was intended to protect the hexagonal design.

The challenge is how to convince investors that they are on to a winner, by de-risking the designs and proving the numbers through testing. “I’ve always been an ideas man,” Findlay continues, and the best ideas appear to be the economics and the scalability of the design. Chief financial officer David Campbell, who came in as a partner in 2010, was attracted by a number of features, and points out that WaveNET “can

be configured from a series of standard components to match the wave conditions of customer sites and their power requirements to give a very cost-efficient solution.” According to Campbell, the smaller-scale devices can also be used for coastal communities and off-grid applications in aquaculture, providing initial niche markets which other devices do not address. The company has recently announced it will be testing its first product – a device called the Squid – this summer. This trial, at a site in Scapa Flow in Orkney provided by EMEC (the European Marine Energy Centre), offers milder conditions than full ocean waves. The “component proof” provided by the Squid testing will be the prelude to a further trial incorporating the proven components into the final design for the first WaveNET array product of several hexagons, with absorbers rising from each nodal junction. The Squid looks very like its namesake when it is collapsed and being towed through the water for deployment, and once on site, it is inflated like a balloon with seawater, placing the absorbers just under the surface. As waves pass by, they move the absorber and the energy is captured and drives a generator to produce electricity. During the trial, the primary aim is to quantify the level of power produced, so cost per kilowatt hour can be more accurately calculated – and verify the efficiency of the conversion, which has already been extensively modelled. Long-term durability testing will then be carried out to understand survivability and operations issues much better. The trial will test a 10kW device - more than a domesticscale wind turbine. In later designs, the individual converters will be upgraded to 50kW each, producing 650kW in a 13-node array, then AlbaTERN will increase the specifications to a 100kW converter which in a 13-node WaveNET will produce 1.3MW. The costs of the project up to the initial trial will be about £500,000 – compared to costs as high as £35 million for earlier devices. One chief objective, says Campbell, is to “prove out the key risks at a lower

capital cost.” The company is now seeking to raise a further £800,000 towards the costs of the final design and production of the first WaveNET product – ultimately leading to much larger investments of “tens of millions of pounds” over the next six years as devices are rolled out commercially. Findlay and his family (John Findlay, David’s father, is the company’s chief executive officer) funded development at the beginning, and Findlay also worked for other companies in the same sector, until he was free to go full-time at AlbaTERN. When Campbell got involved in 2009, he was impressed by the enthusiasm Findlay displayed – and excited by the prospect of low-cost renewable power. Like the Findlays, Campbell is also a keen sailor, aware of the “awesome power of the sea,” and this helped establish a bond. The Scottish Investment Bank is also an equity partner and SMART:Scotland research grants have accelerated technical development.

“I’ve always been an ideas man.” DAVID FINDLAY

An investment round in early 2011 enabled the increase of the team by three people, with additional resources to cover mechanical, hydrodynamics and electrical engineering. The challenge now is how to convince investors they are on to a winner, says Campbell, but the technology is still relatively new, and the design is not yet proven in realworld conditions. Most investors, Campbell suggests, want a proven technology and a good indication of potential returns, so AlbaTERN will have to de-risk its designs, and prove the numbers through testing, to convince investors this is a great proposition. In the search for more investors, Campbell has identified a number of “high-net-worth” individuals with some knowledge of engineering, the marine environment or renewables, and is also talking to companies in the supply chain, including manufacturers of electrical systems and steel fabricators, who don’t just understand the engineering but also see the financial potential. “By getting in at such an early stage, ”says Campbell, “they can add their skills and shape the future route to reaching the opportunities they can understand.” Angel investors and traditional venture capital, says Campbell, do not fit the current profile, because the sector is perceived as high-risk and capital-intensive whilst the returns may be hard to predict and will take longer to achieve. Public funding is important to the sector, says Findlay, who believes that Scotland is ahead of the game when it comes to investment. Public sources of funds include

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the Scottish Government, the UK Department of Energy and Climate Change and the Technology Strategy Board, who understand the difficulties, but also the benefits, of success in marine renewables. Campbell thinks it’s also critical that public bodies support the development of the sector: “Unless there is continued public support of marine renewables at the high-risk early stage, private investors are not going to invest.”

Top: The Squid will be positioned just under the surface. In later trials, a 13-node WaveNET array is expected to produce 1.3MW.

The bottom line for marine energy and other renewables is cost per kilowatt hour, and this is exactly why Campbell got in at the start. “There is lots of support in Scotland through the enhanced Scottish ROCS (Renewable Obligation Certificates) for generation and some R&D funding,” he explains, “but we will only have renewable energy in the future if it is as cheap to produce as the other available methods – but I believe that this will be at a higher level than current prices.” For some investors, wave energy goes straight to the “too difficult pile.” When its trials in Orkney are completed, the team at AlbaTERN is hoping to change this – by making waves in business and government circles with the energy captured from waves.

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How creative are you? Is creativity a magical power or something we all can develop – like muscles? Dr Mark Batey of the University of Manchester explains...

Dr Mark Batey, Joint Chair of The Psychometrics at Work Research Group at Manchester Business School and R&D Director for E-METRIXX, is a specialist in the Psychology of Creativity. In 2009, he was ranked 2nd in the world for published research into creativity and in 2010 appeared with Lord Robert Winston on BBC’s Child of Our Time.

are plenty of myths about T here creativity: Myth 1: Creativity is the special preserve of tortured artists, madcap geniuses and pony-tailed advertising executives. Right? Myth 2: We only need to focus on creativity and innovation in the creative industries, marketing and R&D-led companies. Right? Myth 3: Creativity is a ‘black box’ phenomenon, beyond the scope of rational understanding. Right? Myth 4: Creativity is something you are born with and cannot be learned or trained. Right? Wrong, wrong, wrong and wrong again. This feature will explode these myths and explore how we are all creative, how creativity is fundamental for success in individuals, teams and organisations, how modern research has opened the black box to reveal the different styles that different people adopt when being creative, and lastly how easy it is to assess and develop creativity.

“We assume that 50% of our revenue in 5 years’ time must come from sources that do not exist today. That is why we innovate.” ERNST & YOUNG Connecting Innovation to Profit Report, 2010.

Creativity is the capacity within individuals to develop ideas for the purpose of solving problems and exploiting opportunities.

Exploding Myth 1: Creativity is not the preserve of a special few. It is part of the human condition, resides in each of us and is vital for our success and advancement. It is about solving problems and making the most of opportunities – something we all do, all the time.

Creativity is the crucial starting point that underpins innovation and

Exploding Myth 2: Creativity is vital for all organisations, in all industries.

But first, let’s start by defining creativity.

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entrepreneurship. Without creativity we would not progress our products, processes and services. With no innovation, entrepreneurs would have little to commercialise. In addition, studies have shown that creativity lies at the root of high performance, agility and profit. But perhaps most importantly, it is a skill we all use every day to solve problems and embrace opportunities.

Research has shown that individual creativity can contribute to the bottom line, that creative teams make better decisions, work more efficiently and provide better service, and that creativity and innovation are the Number One strategic aims of companies the world over. It is little wonder that in a global survey of over 1,500 CEOs, creativity was considered to be the Number One leadership trait for the future. And all this begs the question: Does your organisation take creativity seriously? Do you take it seriously? Exploding Myth 3: People who work in the creative industries have tended to promote the myth that creativity cannot be understood, is beyond the gaze of scientific research and that it withers under inspection. However, this is simply not true. There is a lot of research about the different styles people adopt when being creative. This research has culminated in a new model that explains the traits and characteristics that lie behind creativity – the me2 General Factor of Creativity. This new model for understanding creativity is based around four Dimensions: 1. 2. 3. 4.

Idea Generation Personality Motivation Confidence.

Each of these four Dimensions can be broken down into narrower factors.

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me2 model

www.e-metrixx.com

“More than rigor, management discipline, integrity or even vision – successfully navigating an increasingly complex world will require creativity.”

idea generation personality motivation confidence

idea generation fluency

the extent to which a person easily produces many ideas

originality

personality curiosity

IBM GLOBAL CEO SURVEY 2010

the extent to which a person engages with the external world and their own internal thoughts

ambiguity

the extent to which a person is comfortable with uncertainty

confidence producing

the extent to which a person feels confident generating and working with ideas

sharing

the extent to which a person feels confident exposing their initial ideas

For example, Idea Generation comprises Fluency, Originality, Incubation and Illumination (see illustration on right). The new model has opened up the black box to show that how we approach being creative is determined by how we use and generate ideas, our personality traits, what motivates us and, lastly, how confident we are to be creative. When we understand the components that underlie our creative style, we can develop our creative potential. Exploding Myth 4: Creativity can be learned and trained. Period. And a host of research studies demonstrate this. Improvements have been noted in everything from more positive attitudes towards the importance of creativity at work, through to increased on-the-job performance. However, there has been a dramatic shift in how we can help people and teams to develop their creativity. At one time, everyone, no matter what their strengths or weaknesses, was given the same advice on how to improve: Think laterally, think outside the box. Now, we can be much more refined. The starting point for developing any skill must be diagnosis. For example, a tennis coach would watch how you hit the ball, position your feet and move around the court, etc. Then the coach could plan a development programme to work on the best bits of your game

Innovator Scotland - Issue 1 - October/November 2011

implementing

the extent to which a person is confident turning a creative idea into reality

the extent to which a person produces unusual ideas

incubation

the extent to which a person makes time for the non-conscious processing of ideas

illumination

the extent to which a person experiences flashes of inspiration or insight

motivation intrinsic

the extent to which a person has a tendency to derive pleasure from working on personal challenges

competitive

the extent to which a person is motivated to compete

achievement

the extent to which a person is hard-working and strives for excellence

General Factor of Creativity Dr Mark Batey 2010

The me2 General Factor of Creativity is comprised of twelve factors of Individual Difference that together describe how you see yourself with regard to creativity. and address the shortcomings. delivered by E-METRIXX. Above: Creativity development is no So how can you use the me2 General me2 General Private & Confidential © E-METRIXX MMXI Factor of Creativity different. First, diagnose key areas Factor of Creativity psychometric Infographic of strength that can be maximised diagnostic tool?

and the development areas that can be bolstered. After diagnosis, each person has opened the black box and can understand his or her own creative style. Then a development programme can start. This might be in terms of conversations with a line manager, coaching, creativity workshops and leadership programmes, through to culture change programmes to develop a creativity and innovationfriendly climate.

To bring the me2 General Factor of Creativity model to life, a new psychometric tool has been developed. This diagnostic tool for creativity is the result of the marriage of the research capabilities of the Psychometrics at Work Research Group at Manchester Business School and the commercial acumen of E-METRIXX, a leadingedge psychometric tool publisher. In essence, the creative ideas about how to assess and develop creativity that started life in research have been turned into an innovative product

After answering some psychometric questions, a person is presented with an individual me2 report which outlines the psychology behind their creativity, their strengths and what they might look to develop. To support the diagnostic tool, there is also a range of training and workshop materials that can assist coaches, trainers and workshop facilitators to move from initial diagnosis to developing creative potential. So, creativity is a skill that we all possess and use every day. It is fundamental to our own progress as well as for innovation and entrepreneurship. We understand what underlies how people approach being creative and by using the new me2 General Factor of Creativity tool, you too can understand your creative style. So did you spot the deliberate mistake? We should not ask “How creative are you?” but “How are you creative?”

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Q&A

Tom Kitchin

Q. Recipe for success? A. Pig’s ears W

hether he’s mentoring contestants on Masterchef, cooking up a storm on Saturday Kitchen or making the news (he’s a regular Scotsman columnist and was the Observer’s 2010 chef of the year), it’s hard not to notice Tom Kitchin – whose restaurants Castle Terrace and The Kitchin are helping to transform the reputation of Scottish cuisine. But Kitchin is not your usual celebrity chef – he wants his customers to see, through The Kitchin’s glass panel, that he is there for every service, and he wants to see exactly where all his ingredients come from, whether it’s grouse from the Borders or apples from his grandmother’s garden. Kitchin’s cooking philosophy is summed up by his mantra “from nature to plate” – he uses seasonal and local ingredients to showcase the Scottish larder, but uses his French training to turn up dishes like the boned and rolled pig’s head with a crispy pig’s ear salad (his signature dish) or lamb cooked on a bed of hay. He’s not quite in Heston Blumenthal’s nutty professor league, but his approach is certainly original. So does this make Kitchin an innovator, and does he see himself as one? MARIA BARR poses the questions... Do you think of yourself as an innovator? Can you give us an example? To be successful as a chef you must be constantly striving to improve your cooking and offer your guests something new, unique and exciting. Being innovative is about always trying new things and pushing yourself to the next level – this is something I had instilled in me from my early training and a lesson I hope to pass on to my own team. Working as a chef in Scotland opens up a lot of opportunities for innovation in my cooking – the country has the most fantastic natural larder so there are some amazing suppliers locally, offering exciting new ingredients which allow me to experiment with different seasonal dishes year round. A lot of chefs enjoy trying new ingredients but it is a real skill to be able to use them to come up with new inspiring dishes. What does innovation mean to you? And why does it matter? A true innovator is ambitious, never sits still and is always looking for new, more effective ways of doing things. As a chef this is hugely important – the time I spent working for and learning from some of the world’s top Michelin star chefs taught me the importance of attention to detail and now I make sure that I am constantly looking for new ways to add even more special touches to the dining experience. People are always looking for new things to try and there are new places opening all the time so you really have to keep pushing yourself to stand out and be the best.

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A true innovator is ambitious, never sits still and is always looking for new ways of doing things. Do you see much innovation in the food and drink sector in Scotland? Do you think our culture encourages innovation? The food and drink sector in Scotland really is thriving right now and there is some outstanding food on offer. Chefs throughout the country are constantly trying new things and, as a result, Scotland has shaken off its reputation and become renowned for its outstanding natural larder.

Above: Tom Kitchin won his Michelin star in January 2007, six months after opening The Kitchin, he was the youngest Scottish chef to do so at just 29.

Can innovation go too far? What do you think of chefs who marry cooking with science, such as Heston Blumenthal? I have a huge amount of respect for Heston – he works very hard at what he does and has become successful as a result. I think to appreciate cooking you have to try new things and that’s what people like about him. He creates excitement by mixing unusual foods together and takes diners out of their comfort zone, which to me is what good cooking is all about.

October/November 2011 - Issue 1 - Innovator Scotland

Reader offer

How are you creative? Get your FREE personal me2 creativity report worth £50 when you subscribe to Innovator Scotland Innovator Scotland is published bi-monthly. 2,000 of the 10,000 copies we print are sent to named individuals but the mailing list will change with each issue to ensure more and more people get the chance to discover Innovator Scotland. 8,000 copies are available at selected business and research sites all over Scotland plus some strategically important venues elsewhere in the UK and overseas. To ensure you get your personal copy, a subscription for the next 6 issues to be delivered right to your door is just £14.99. Great value for an inspiring read and to stay informed about what’s happening in Scottish innovation.

Creativity is the single most important leadership trait. IBM GLOBAL CEO SURVEY 2010

To subscribe Email subscribe@innovatorscotland.com and we will send you a subscription form and your personal login to the me2 creativity diagnostic tool. Subscribe before 30th November 2011 and you will also receive a me2 creativity workbook to help you increase your creative thinking including 10 different tools to assist idea generation and idea evaluation.

Innovator Scotland - Issue 1 - October/November 2011

me2 is a diagnostic and development tool to help individuals, at every level, understand the psychology behind their capacity for problem solving and exploiting opportunities – this is what psychologists call ‘Creativity’. The me2 model comprises twelve individual factors that together yield the world’s only General Factor of Creativity. It is the result of ground-breaking research by world-leading psychologist, Dr Mark Batey. The me2 questionnaire takes around 15 minutes to complete online and the powerful psychometric algorithm generates a 23-page report unique to the individual. This explains the psychology of creativity, sets out the individual’s creativity profile and identifies potential areas for development. The me2 algorithm can generate over 244 million individually different reports. The me2 product is supplied by E-METRIXX who develops and publishes on-line psychometric tools relevant for the 21st Century. All tools are based on the latest research coming out of the Psychometrics at Work Research Group within Manchester Business School and are proven through detailed factor analysis before being developed into commercially available products. www.e-metrixx.com

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Profile

Power Textiles

Sunrise industry The future’s bright for a new company that has found an ingenious way of integrating solar panels into fabric... By PETER BARR

t could help save lives after disasters like tsunamis or earthquakes. It could add several weeks to the growing season for soft fruits in Scotland. It could provide “clean” electricity to buildings or reduce the weight carried by soldiers in combat. It could be used on planes, trains and automobiles. Or it could even become the next “must-have” in fashion. A chemist and a physicist in Scotland have developed a novel solution that transforms man-made textiles such as polyester and nylon into power generators by integrating photo-voltaic (PV) cells into the fabric. The process can also be adapted to include organic solar cells on textile fabrics, while other novel substrates could also be used. And the problem is not thinking up applications but how to stem the flood of new ideas. Other companies have tried to create fabrics which incorporate photovoltaics, but Power Textiles Ltd has gone a step further by integrating flexible solar cells into the fabric rather than using “interfacing membranes” to sandwich the cells between layers of fabric. Their textiles can also be cut without damaging the cells. The

Selkirk-based company’s different approach will enable textile producers to make rolls of fabric which integrate thin-film silicon solar cells as easily as sequins. And it started with a very simple question – “Why don’t we put PV cells into clothing?” asked a textile executive one day, to his good friend the chemist, who is also an expert in technical textiles. “Good idea!” said the chemist. “I know a physicist who is a PV expert. Let’s do it!” Thin-film silicon is not new and the idea was to somehow incorporate the solar cells into all sorts of textiles – in other words combine existing materials to create a new solution which is greater than the sum of its parts. Conventional solar cells are sandwiched between two layers of glass. They are inflexible, heavy and fragile but Power Textiles has developed “solar textiles” using flexible substrates which can be woven into fabric and easily rolled up and unrolled, then cut up and wrapped around more or less any shape – including people and buildings. One application which has already attracted significant interest is

disaster relief – making tents which power their own lights and heating. Farmers in Scotland have also shown interest in solarpowered polytunnels which can help extend the growing season for soft fruits such as raspberries and strawberries by capturing and optimising sunlight to radiate low-level heat even during hours of darkness. A few extra weeks in the season would make a huge difference to farmers in revenue terms. If they could also grow more exotic fruits and vegetables, normally imported from countries thousands of miles away, they would not only increase their profits but reduce our carbon footprint by cutting the fuel used in transport. Instead of heavy solar panels being awkwardly fitted to buildings, a membrane could be cut to fit and wrapped around even the most complex geometries. Cars could have their chassis moulded from the special solar textiles. Dr Robert Mather (the chemist) and Professor John Wilson (the physicist), have come a long way since that first conversation, and are now on the verge of attracting major investors.

Comment “The Power Textiles technology is a prime example of innovation which brings together different kinds of technologies. The invention represents a significant breakthrough in the field of photovoltaic cells not because of the technical complexity involved, but because of the radically new approach to PV cell design and manufacture. It provides a relatively simple solution with tremendous commercial potential but the inventors may be vulnerable to copying. By securing patent protection, the inventors ensure firstly that they gain a monopoly for the commercial exploitation of their invention, and secondly that the value of the IP assets generated can be maximised by drawing interest from potential investors in the technology.” Yann Robin (Patent Attorney), Marks & Clerk

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October/November 2011 - Issue 1 - Innovator Scotland

Applications for their new technology are also creating a lot of excitement in a number of industries. They recently held a brainstorming session with Matrix Business Growth Consultants of Hamilton to discuss applications and decide where to focus attention. The two men were aware there was a danger of having too many ideas, rather than too few, and this session helped to “concentrate their minds,” says Mather. Initially, Mather and Wilson imagined that active clothing would become the major market, but as time went by, the applications multiplied and fashion has become less important. Combat gear may be a good application for clothing, however. Soldiers often have to carry packs weighing about 55kg, including 9kg of batteries. Replace the batteries with “power” clothing and they’re immediately more mobile. Consultant Robert Bruce, who has worked with the two partners since the beginning, describes the company’s 4-stage process of growth: 1. research and customise the solar cell technology 2. partner with a textile producer who can supply the base materials (e.g. polyester and nylon) 3. integrate the cells into the textiles 4. develop applications/products Innovator Scotland - Issue 1 - October/November 2011

Bruce also strongly feels that “the technology has mileage and will lead to many, many applications in future.” Power Textiles was launched in 2007 after Mather Technology Solutions, a consultancy specialising in technical textiles, run by Mather, won a SMART: SCOTLAND award from Scottish Enterprise to develop the product and explore new market opportunities. The business body also funded mentoring and brainstorming sessions, and Mather and Wilson believe they would not have been able to get where they are without Scottish Enterprise backing.

The technology has mileage and will lead to many, many applications.

known humanitarian organisation, and may also license their solution. “The culture is already there in the car industry,” Mather explains. “More flexible materials like polymers are being used to create the new generation of cars, and manufacturers are looking for ways to save power – especially for hybrid cars.”

Above: Professor John Wilson, co-founder of Power Textiles. Opposite: Dr Robert Mather picks up the firm’s SMART: SCOTLAND award.

One of the major advantages of using textiles in this way is that the fabric has known properties and problems which can be addressed to create a cost-efficient and flexible product. Power Textiles has already proved the concept and been awarded a patent but the technology still has to move to the prototype stage, and in order to do so the company needs an injection of funds – preferably from several major customers who believe in the product and can see the potential.

ROBERT BRUCE

The two founders remain open-minded about future funding and both agree they need to revise their business plan and change their management structure to cope with the next phase of growth.

Since then, the company has realised that one of the best ways to accelerate progress is to partner with a customer in one of their most promising markets – for example, horticulture or construction. They have also been approached by a major automobile component manufacturer and a well-

When Mather and Wilson first established the company, someone commented: “You’re just two academics – what could you know?” But the two men have already proved they’re capable of generating interest in their novel solution – as well as generating power from textiles.

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Idea to exit: maximising the value of innovation FROM Apple to ZTE, a strong intellectual property portfolio plays an integral role in the success of innovative companies. From protecting technical innovations at their earliest stages, through to raising finance, generating revenue and maximising valuation upon exit, patents, trade marks, designs and copyright turn intangible assets into competitive advantage. A legal monopoly Patents protect new and inventive technical features of a product or a technical process and are the most relevant form of protection for those working in the field of scientific and technological innovation. Registered Designs offer protection for the visual appearance of a product. Trade marks are signs or symbols that distinguish your goods and services from other brands. Copyright offers automatic protection to works such as literature, art and music. Patent protection provides a monopoly right to prevent others from performing the invention for a typical duration of 20 years. This protection can be extended to virtually any country in the world, providing the patent owner with an arsenal of legal rights to enforce against any infringing party. For example, a granted patent enables the patentee to apply for injunctions, seek damages and even seize infringing goods. That said, the wider importance of a strong IP portfolio as a key business asset is too often overlooked. Obtaining patent protection can be costly and so patent owners must ensure they fully exploit their IP to maximise the return on their initial investment. Revenue and investment Licensing of patents may provide a patent holder with an additional source of revenue as royalties can be collected from the authorised use of the protected technology. This is a particularly useful strategy where an enterprise has patent protection but is unable to meet market demand, or lacks the resources to fully exploit the invention, or has limited experience in that market. Patent protection also opens up the opportunity to enter into cross-license agreements with competitors or collaborators. This is especially useful where an

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invention is an improvement on another’s process or article; to use or manufacture your own invention would potentially infringe the other party’s patent. However, by entering into a cross-license agreement you would both be entitled to work the invention without fear of infringement proceedings. A good scope of patent protection can strengthen your position when negotiating the terms of such an agreement. Another increasingly important role of IP is in attracting investors. Due diligence carried out for investors or buyers will require a thorough assessment of the IP portfolio. Unprotected technology is a risk and potential investors and/or partner companies need to be reassured that the company and the technology they are investing in are properly protected. A strong IP portfolio is also a core element of any exit strategy. Spinouts and exits The commercialisation of IP created in universities has increasingly gained in importance as a method of generating revenue. Spinout companies embody one aspect of this strategy; these highly innovative enterprises are usually based on cutting edge research and are widely recognised as having high growth potential. For an innovative spinout company, an effective IP strategy should form an integral part of their business model. A significant problem for the inexperienced in the patent field is an erroneous belief that what they have invented is not patentable – and this is a particular problem in Scotland. This can lead to a failure to harvest the IP appropriate to the company’s needs. However, there are many granted patent rights which relate to incremental improvements in existing technology, rather than major leaps forward into the unknown. It can often be such incremental improvements that allow a product to enter the market place. Consulting a patent attorney at an early stage ensures that no disclosures of a new technology prohibit the inventor obtaining patent protection. This is an especially important consideration for those involved in rapidly developing areas of research. The recently published Spinouts UK Annual Report 2011 - supported by

October/November 2011 - Issue 1 - Innovator Scotland

COMPANY VIEWPOINT

Marks & Clerk - revealed that Scottish universities have surpassed other UK regions in terms of the number of spinout companies generated. Encouragingly, over 150 spinout companies have been spawned in the last 11 years, indicating that Scotland continues its longstanding tradition of producing enterprising and inventive individuals. Despite this, a disproportionately large number of these spinouts did not make a successful ‘exit’ and either underwent a voluntary dissolution or went into liquidation. In view of the level of investment and resources pooled into these spinout companies, it should be a central aim for all those involved to improve the proportion of successful exits, that is, those companies achieving flotation, trade sale or a merger with another company. Help for SMEs Good news for innovators came recently in the form of the Hargreaves Review of UK IP law. The report, commissioned by the Prime Minister in November 2010, was given the task of examining whether current IP laws are still fit for the purpose of promoting innovation and growth in

Innovator Scotland - Issue 1 - October/November 2011

the UK economy. The main focus of the review is on copyright law which is struggling to keep pace in a digital age, but the review also singles out aspects of patent law for reform.

“

For innovative companies, an effective IP strategy should form an integral part of their business model.

”

In particular, the review emphasises that the creation of a unified European patent system should be a priority, as this will greatly reduce the costs associated with obtaining patent protection throughout Europe. Whilst any reform in this area will require agreement at a European level and is unlikely to happen quickly, it is encouraging to see that it will remain on the agenda for the British government. The review also recommends that special provisions are made for SMEs and that greater access to IP advice be made available for small businesses. If these recommendations come to fruition it will be far easier for small innovative enterprises to gain effective IP protection for their research and technology. Dr David Moreland Glasgow Office Managing Partner Marks & Clerk LLP dmoreland@marks-clerk.com

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Promotion

Title

Time is precious. Spend it wisely. How to own a yacht without the hassles and all the expenses

n March this year, TIME magazine carried a feature “10 ideas that will change the world”. Number eight in the list of ways to tackle our worst problems, from war and disease to unemployment and deficits was “Don’t own. Share”. The item posited that someday we’ll look back on the 20th century and wonder why we owned so much stuff. The trend towards sharing not owning is already transcending many different product categories. The concept that some people will pay for the benefit of having access to a product as opposed to paying more to own it outright now even has its own name - collaborative consumption (see side panel for further insights about the business model). Owning a yacht is far from a practical proposition, with a high acquisition cost, increasing annual costs and a depreciating asset that lies idle at its expensive marina berth for much of the time. For those who can afford access to such a craft 24/7, 365 days-a-year, the figures don’t really stack up as sound economical sense and the majority of people could not even begin to contemplate yacht ownership. Prime territory then for sharing not owning. That’s where fractional ownership or boat membership comes into its own – reducing the outlay and ongoing expense whilst giving you the benefit to use your yacht as if it were your own, without the hassles, fully managed. You can still enjoy the pride of ownership whenever you step aboard yet you experience none of the traditionally associated headaches - financial, maintenance and other such issues. Pretty much all the plus points with none of the downsides. Fractional ownership is not only an opportunity for those who could not previously afford a yacht to get a chance to experience the thrill of ownership but similarly for those who would have previously purchased their own vessel, they get to invest much less money and possibly enjoy a newer, bigger yacht – and spend more of their precious leisure time on the water.

Scotland is renowned as one of the finest sailing areas in Europe and is the first choice of many sailors who live elsewhere.

Scotland’s marinas are owned by non-residents, and this can be much higher at some marinas. ScotBoats yacht membership makes having your own boat in Scotland more affordable, accessible and no hassle. ScotBoats will be at the Kip Boat Show on 14-16th October.

www.scotboats.com ScotBoats is introducing yacht membership to Scotland. The company studied the various existing operators based on the South Coast, with about 50 boats between them already, and networked extensively in Scotland. Getting around and talking to as many people as possible has proved to be invaluable in helping to choose and specify the first two yachts and where they will be berthed. Ultimately, Hanse yachts were chosen and supplied through Inspiration Marine, dealers at Kip Marina near Greenock. That combination ranked top for performance for experienced sailors and ease-of-use for the less experienced member, combined with value for money and dealer support which are vital to the business. Knowledge of customer needs and product innovation helped the Hanse to be first choice. Whereas many yachts can have a self-tacking jib retro-fitted, the Hanse is designed around this rig configuration which makes sailing much easier when single-handed or just two up, and hence opens up more sailing opportunities for members who might otherwise depend on finding crew. ScotBoats shoulders the financial burdens of investing a substantial sum upfront, paying interest, and incurring significant depreciation through the years of ownership. Instead the costs are spread across up to eight members per boat and its time in the fleet. Scotland is renowned as one of the finest sailing areas in Europe and is the first choice of many sailors who live elsewhere. Scottish Enterprise’s research on the sailing sector in Scotland identified that around 20% of boats berthed in

Insight Collaborative consumption

www.collaborativeconsumption.com Collaborative consumption is based on the concept that some people will pay for the benefit of having access to a product as opposed to paying more to own it outright. For a quick and inspiring read, try Kate Hughes’ article “How to live like a millionaire – even if it’s only part-time” in The Independent, published 1st March 2008, still available at independent.co.uk TIME magazine (2011-03-21) named Collaborative Consumption as one of the “10 Ideas That Will Change The World”.

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Pennies from heaven? You may pray for dollars and cents in your quest for an angel investor, but according to John Waddell of Edinburghbased Archangels, patience, trust and understanding matter even more than money... By PETER BARR

he figures are impressive. Since Archangel Informal Investment (Archangels) was set up in 1992, its syndicate members have invested more than £60 million in over 65 early-stage companies and are currently investing £10 million every year. They have made two exits in the last six months (harvesting their profits from successful investments along with the companies’ original founders) and there are several other exits in the pipeline. Since chief executive and “gatekeeper” John Waddell joined six years ago, he’s looked at over 500 business plans and singled out two or three propositions per year for investment. Last year, there was a bumper crop, with five new investments. But despite the fact that Waddell always aims to make serious money from every investment, he’s concerned with much more than the numbers – what gets him up in the morning is that he finds angel investment fun. One thing that makes it fun is that Waddell does not just write cheques and wait for the profits to fly through the door but works very closely with the companies he and the syndicate members invest in. And he enjoys helping early-stage companies make their dreams come true. The initial investment is not the end of the story but the start of a business

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relationship. “People are surprised how much we get involved,” says Waddell. And if you’ve sent a business plan to Waddell and are waiting to get his response, it doesn’t mean he has forgotten you. He reads every single proposal but may be busy helping out a company in which he has already invested. He may be the gatekeeper but he also rolls up his sleeves when he needs to – not just dealing with ongoing crises but even handling early tasks like “scrubbing up” the business plan or helping decide whether the best way forward is to license the idea or do-it-yourself. Often, says Waddell, the priority is to install the right management team, no matter how clever the idea may be. Management is critical to every new enterprise and the people who come up with the original idea are not necessarily the best equipped to run the company or even make presentations, but finding the right kind of people and persuading them to get involved can be extremely difficult. As Waddell describes it: “Much as we would love to have one, we don’t have an incubator somewhere in Scotland for entrepreneurial management teams.” Many early-stage companies have great ideas but struggle to commercialise them and engage with capital – but

October/November 2011 - Issue 1 - Innovator Scotland

business is not always “red in tooth and claw,” says Waddell, despite the image sometimes portrayed in the media. Waddell and his partners are also proactive – they seek out good prospects and have a well-established network which extends throughout Scotland, gathering intelligence and spotting new talent. When Waddell persuades his fellow board members to invest in a company (say, £100,000), they then seek out additional investors to fill the whole book. Scotland offers many opportunities, says the Inverness-born lawyer, and will remain the focus of future investments, often in partnership with the Scottish Investment Bank. In Waddell’s view, venture capital has largely abandoned Scotland and the angel investors (about 20 in total) fill the gap. Many investors are keen to strike deals with companies or individuals they already know, and Archangels likes to believe it knows about most investment opportunities. So how should an early-stage company make its initial approach? “There is no protocol,” says Waddell. What matters most is having good ideas that could win, particularly a business with strong international potential and watertight intellectual property (IP) protection.

Innovator Scotland - Issue 1 - October/November 2011

Waddell believes that Archangels is on a par with some of the top US angel investors in terms of how it operates and its success rate. “We are not running an investment fund,” Waddell explains. “It’s much more than that – it’s making the maximum out of every deal by using our network to help create value.” The hands-on approach also works well for Waddell and the syndicate members. And on top of “patience, trust and understanding,” he identifies the critical success factors as hard work, intellectual rigour and emotional strength. “Sometimes, you have to tell people things that they don’t want to hear,” Waddell explains. But if he says “Yes!” to your plan, you could be in business.

The critical success factors are hard work, intellectual rigour and emotional strength. JOHN WADDELL (left)

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Title

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There’s no business like biobusiness

Title

Kamikaze bacteria, shark serum, dandruff, angel investment and blockbuster drugs – Andy Porter’s conversation is a heady cocktail of science and business. And cocktails are another hot topic for the scientist and entrepreneur - who is also part-owner of one of Aberdeen’s trendiest nightspots... By PETER BARR

“Y

ou’ve found a compound at the bottom of the ocean that could be a cure for cancer, and in six weeks you’ll apply for a new round of funding. Now get on with it!”

This is how Professor Andy Porter starts one of his classes at the University of Aberdeen, where he teaches biobusiness to life sciences students. But Porter is not just an academic – he’s a scientist who co-founded one of Scotland’s most successful drug discovery companies then sold it to one of the world’s pharmaceutical giants, and he now believes he’s spotted the next big star in biotechnology. “I’ve had a few ideas in my time,” says Andy Porter. “But I focus much more now on spotting ideas.” One of Porter’s best ideas was helping set up Haptogen in 2002 and five years later selling it for a sum described as anything from “peanuts” to “comedy numbers,” depending on who tells the tale. And the ideas keep coming... Porter, who is Professor of Biotechnology at the University of Aberdeen, is now one of a triumvirate at Grampian BioPartners (GBP), an angel investment firm which “talent spots” up-and-coming biotech firms – just as Haptogen was spotted several years ago. In Porter’s view, one of the secrets of Haptogen’s success was that it recognised early and adapted to the Scottish model of biotechnology which often requires a mix of R&D and revenues to de-risk a proposition for investors. This does not mean the Scottish model is a good model, says Porter. In fact, in many ways it slows down the process of innovation. “The problem with many (but certainly not all) early-stage businesses,” Porter explains, “is that as they embark on the key transition from seed and early

investment stages to a more typical value-building model, their founder CEOs are sometimes reluctant to step aside and allow more recognised industry figures to progress the business to its next stage. This of course assumes these individuals are available to Scottish business, but unfortunately there remains a critical shortage of suitable candidates.” Porter founded Haptogen in partnership with Dr Gillian Broadbent and Dr Keith Charlton, now also his partners at GBP. According to Porter, they all had to decide whether to accept offers to join the expanding biotech community in England or try and go it alone and set up a company in Scotland. “Our main driver initially was not really to deliver a commercial success but to stop the ‘brain-drain’ of antibody engineers from Aberdeen to Cambridge.” Haptogen focused on using human antibodies to target extremely small signalling molecules or “haptens” rather than, for example, targeting the bacteria themselves – aiming for targets “beyond the reach of other immunotechnologies.” By targeting the signalling molecules rather than the whole bacteria themselves, the new drugs make it harder for the bacteria to develop resistance. “The bacteria don’t know they are under attack, and can even be encouraged to commit suicide,” Porter explains. The overall aim was to develop more specific and safer drugs to fight infections, inflammation and liver disease, and improve diagnostics, in the process pioneering a new approach known as Haptomics. Porter and his team also used antibodies from sharks to develop new therapeutic solutions. These small and robust proteins had the potential to be delivered orally and “reach parts of the body other antibodies couldn’t reach.”

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Profile

Andy Porter Andy Porter co-founded one of Scotland’s most successful drug discovery firms.

you need the basic science, but he also recognises that not every student is cut out for business, stressing that what matters most is to understand how the pharmaceutical and biotechnology industries operate. In the Scottish biotech sector, says Porter, most companies end up with a split business model, pursuing core research at the same time as earning money from consultancy and related activities. “Most Scottish companies are forced down the revenue route too early,” he adds. His perspective on the biobusiness also sheds light on the weird and wonderful financial dynamics. For example, one company may have revenues of £100 million a year and be valued at £400 million, while another firm has revenues of £50,000 and is worth over £1 billion based on a validated “drug-engine” and/or a blockbuster drug pipeline.

Because this new approach had great commercial potential, investors soon started sniffing around. The company was almost floated on the stock exchange in 2006 but fate intervened when a clinical trial by an unrelated company called TeGenero went horribly wrong – and one effect on the biotech sector was that the “feeding frenzy” in financial markets came to a temporary halt. Biologics, however, was still a hot place to be and Haptogen was purchased by Wyeth the next year. “We sweated blood to keep the business going,” says Porter, “and our efforts paid off in the end. We added value locally, too, by bringing Wyeth and now Pfizer to Aberdeen – establishing the city as the capital of drug discovery in Scotland, and the largest biologics cluster in the UK outside of Cambridge.” Ironically, Haptogen’s first customer was Pfizer. And Porter admits that he and his partners did not have a clue at the time about pricing and sold the solution to Pfizer – an antibody for a drug target – for a quarter of what it was worth. This “loss leader” got the business going, however, and the company was far from being clueless. “Looking back, I think we never realised how good we were at certain things,” says Porter. “We were also a good combination of b******t, brains and the ability to deliver good science – we did the experiments that matter.”

We sweated blood to keep the business going.

When he teaches biobusiness (“to send more businesssavvy scientists into the world”), Porter likes to sum up the “madness” of the industry by telling his students: “Biotechnology makes nothing, sells nothing and has no customers.” Yet as Porter himself has discovered, this is not a barrier to commercial success. So what is his advice to Scotland’s budding biotech entrepreneurs? “Think global and promote yourselves globally,” says Porter. “In Scotland, we have a tendency to be insular, but young companies have to get out there – decide what are the most important commercial conferences and don’t just attend them but present from the platform. It’s about building a brand and getting yourself noticed.” Porter now aims to use his experience to identify promising biotech firms and turn them into even bigger successes, via GBP. And part of his job is to demystify the science for investors. When GBP spots a promising firm, it normally invests a sum of about £50,000-200,000 as a sign of its commitment, then other investors come in, based on GBP’s assessment of the company’s value. In one case, GBP invested only £50,000 of funding and a single investor put in £1 million. And when it comes to analysing a company’s prospects, Porter says he is “obsessive” when it comes to the data. The philosophy at GBP is simple: “Focus on what we understand, find the hot places and second-guess the market.” Is it world-class science? But importantly is there also a significant market opportunity? GBP believes the “hot places” in biotech are biologic drug discovery, immunotechnologies & diagnostics, and regenerative medicine tools

The early days of Haptogen were a white-knuckle ride at times for Porter and his partners. At one stage, they only had £1,000 in the bank and “blew” £920 of it on a Christmas party, hoping cheques for contracts would clear in the next few days. Despite this uncertain commercial environment, the firm grew to 30 people and never missed a salary payment. Their experience isn’t unusual. “The typical biotechnology company is always only six months away from success and six weeks from going bust,” Porter reflects.

The companies it backs include: Pharmacells, Antoxis, ImmunoSolv, Bioven and Siogen.

Porter’s career has evolved through a number of stages, from manager and scientist to entrepreneur and now includes his role as “biobusiness teacher.” He strongly feels that to succeed in the commercial side of biotech,

GBP not only invests its hard cash but also tries to help with the science and steer the corporate development. “I understand the fears they have,” says Porter, “because I’ve been through it. The fear of failure’s never far away.”

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Tip for the top is NovaBiotics, “the most exciting biotechnology company in Scotland” at the moment, which has already attracted £3 million in five rounds of investment and is currently raising a further £10 million. It is also close to releasing its first “blockbuster” product – a solution for nail fungus called Novexatin.

October/November 2011 - Issue 1 - Innovator Scotland

Andrew Glidden

Insight

ANDREW GLIDDEN

is Creative Managing Director of Glidden Design and has 25 years’ experience working on design and branding projects worldwide

There are many companies who understand the power of branding, have identified their target audience and communicate appropriately.

www.gliddendesign.com

Think brand, not logo S

o you now have your worldbeating product – after years of technical, financial and psychological struggles. You’ve convinced your friends and family and some people in suits that your idea is brilliant, and now you are ready to conquer the world. But wait a minute – how do you let people know it is yours? And where do you stick the logo? There’s a flat bit on the side of the casing – that will do, won’t it? But if we use it that size, it looks like a squashed fly, so let’s not put the logo on the product – let’s use the box. There’s a space on the label that will probably do, but the logo’s the wrong shape entirely. So, let’s squash it a bit. There – perfect. But wait, we need to tell the world that it exists, and where to buy it. In fact, people probably need to know what it does first, so everyone will

want one. I know a printer – he’ll knock up an advert. I’ll send him the logo in a Word file – that should do the trick. And how about a website? Everyone needs one of those. “That bloke we met at the party is a website designer, isn’t he? I’ll send him the logo and and a couple of pictures of us, so everyone knows what we look like.” This may be an extreme example but from experience, it’s not so far from how some companies view branding... A brand is not simply a logo. A successful brand is a dialogue with many people, taking place on many different levels. It creates an expectation of performance. It creates a clear perception. Take Mercedes, for example. Put the Mercedes three-pointed marque on a briefcase and how does it affect your expectations? It may be more expensive than a ‘standard’ product but you expect it to be beautifully made and last a lot longer. You also have a picture in your mind of the kind of person who would buy it. So where did all this ‘baggage’ come from? How did a little circle with three points inside it conjure up all of this? That is the power of branding. The marque (I personally dislike the word ‘logo’) is merely shorthand for all the communications that have gone before: advertising, showrooms, cars, reviews, history, sponsorship, brochures, website, packaging, etc. Each of these references a consistent set of values, forming a picture of what Mercedes stands for. Good branding taps in to the sub-conscious – it connects on an emotional level. Simply reinforcing a company ‘logo’ is not enough. Powerful brands tell their story to consumers.

Innovator Scotland - Issue 1 - October/November 2011

There are many companies who understand the power of branding, have clearly identified their target audience and communicate appropriately in terms of how they wish to be perceived – e.g. McDonalds, Orange, Irn Bru and Apple. So how do you develop your own brand? My advice is to speak to several professional branding companies. Ask them to give a credentials presentation, showcasing work they’ve done for other companies. Does the chemistry feel right? Could you work with these people? Is there mutual respect? Then brief them and ask for a written proposal outlining the steps, deliverables, professional fees and any specific qualifications or exclusions.

A successful brand is a dialogue with many people. Don’t ask them straight away to propose some ideas. Good branding built on sound strategic vision can’t be done by guesswork. It requires the branding company to get to know you – your aims, challenges and values – before commencing any creative work. All this takes time and money but is well worth the investment. In fact, any company prepared to pitch creative solutions to win business without exploring your strategic aims is either desperate or doesn’t know what they’re doing. Look at the top companies in almost any business sector and you will see that branding is an extremely powerful business asset. Don’t think of it as a ‘logo’ – think of it as a complete personality.

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Title

But is it legal? How does a 200-year-old legal firm become an innovative company fit for the 21st century? By PETER BARR

awyers are not often thought of as great innovators, and that’s a challenge facing Linda Urquhart and the rest of her partners today.

Now chair of Morton Fraser after more than ten years as Chief Executive, Urquhart spends her time exploring new ideas and opportunities, making sure clients are happy and making connections with business and government leaders, and she feels very strongly that innovation is about much more than science and technology but also “how we do things and improve our business processes.” Innovation is not only brilliant inventions but how to reinvent ourselves – everything from branding and packaging to marketing and how to deliver better services to clients. “For a legal firm, the challenge is always why clients should choose one lawyer rather than another,” says Urquhart. “How can we make a difference? How can we stand out and deliver tangible benefits to clients?” To describe the special challenge facing legal firms and other more “conservative” businesses, Urquhart quotes Einstein’s definition of madness – “doing the same thing over and over again and expecting different results” – and adds her own perspective: “We have to realise we can’t always do things the same way if we want to compete.”

Too many people talk about innovation rather than innovating. LINDA URQUHART Lawyers are not generally well known for lateral thinking, “but we have had some innovative thinkers in our midst,” says Urquhart. “Morton Fraser was also an early adopter of IT solutions – and we won new business as a result because we were able to demonstrate concrete results.” Morton Fraser has always been keen to identify areas where it can make a real difference for clients – for example, online access to accounts, so clients can check day-to-day activities, saving time and money and generating automated monthly reports. Another innovation is the Designed For Life website, which offers “lifelong” advice to individuals on topics such as financial planning, wills, educational trusts, property, health care, insurance and retirement planning. The firm also recently launched a new employment law app for the

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October/November 2011 - Issue 1 - Innovator Scotland

iPad, in collaboration with R2b Media Ltd, following the success of a similar app for the iPhone which was called MF-HRMobile. Not all innovations are high-tech, however. Before Urquhart became CEO, the firm set up a new relocation division which emerged from the realisation that the firm already had what it took to move into the business – including the people. “The key was our ability to spot the opportunities and be innovative about skills and how to apply them,” says Urquhart. “For example, we had a great tax team.” Innovation is also a process, says Urquhart: “Continuous improvement is essential – asking ourselves how we can make a difference and interact better with clients.” And as well as blue sky thinking, the firm is always on the look-out for pragmatic innovation, “keeping ahead of the game by identifying in advance what clients need and want.” How does this approach translate into human resources? “Being innovative with employees is a difficult challenge at a time when many firms are freezing salaries,” Urquhart admits, “but career path development still gets a lot of attention.” For example, Morton Fraser’s HR team has developed a project which helps senior lawyers develop new skills and encourages lawyers who aspire to be partners to identify new market opportunities. Urquhart’s current role is to act as an “ambassador,” getting out and about to connect with its clients and potential clients – individuals, public sector and business. No longer a practising lawyer, she used to specialise in commercial real estate, and seeks to bring that past experience into her present position. She wants to know what people want from their lawyers and what they think of their performance. “We aim to be trusted advisors,” she says, “and my job is to understand their business. Many lawyers tend to be narrow in focus but it’s important to know what clients are thinking, especially in such a competitive market.” Urquhart also believes her legal background and experience managing a large legal firm brings a useful perspective to her work in the more general business environment, as chair of CBI Scotland and a board member of Scottish Enterprise. She describes this as “evolving from a lawyer into a businessperson.” As well as gathering intelligence and feeling the pulse of the economy, Urquhart is passionate about Scotland and Scottish business. “If we all do something, we can make a big difference,” she says, “but I don’t tolerate people who talk a lot about doing things rather than doing things.”

Innovator Scotland - Issue 1 - October/November 2011

Does Urquhart consider herself an innovator? “My role is to create an environment where innovation can flourish – much the same as the strategic aims of CBI Scotland.” Her work at the CBI revolves around a dialogue with government, supporting innovation and providing feedback on regulation, fiscal policy and education. She is also concerned about saying when government gets in the way, and relaying feedback from the regions.

Left: Linda Urquhart Chair of Morton Fraser and CBI Scotland

“As chair,” she says, “I aim to bring my practical experience to government and make sure that the voice of Scottish business is heard – what issues exercise them and how we can influence government to create a better business environment.” The CBI has also introduced innovations – for example, Intelligence First, which seeks to capture the expertise of the CBI for its members, to improve decision making and build in-depth knowledge. Urquhart is concerned that we should place a greater emphasis on innovation to compete in the global economy – for example, the low-carbon economy, where many companies see business opportunities while others need to cut costs and energy use. “When it comes to innovation, sometimes there’s too much emphasis on science and technology. There needs to be a broader view – for example facing up to the challenges of delivering more innovative services at the same time as reducing government spending,” she says. Urquhart recognises there are lots of people and organisations involved in commercialisation, many of them also overlapping with each other. She thinks the universities are getting much better at connecting with business, but she is more concerned how businesses can navigate these agencies to find the innovations they are looking for. “Too many people talk a lot about innovation rather than innovating,” Urquhart concludes. But judging by the impact she has had on Morton Fraser, she is not guilty.

My role is to create an environment where innovation can flourish . . . I aim to bring my practical experience to government and make sure that the voice of Scottish business is heard. LINDA URQUHART

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About Innovator Scotland

Be inspired

Be informed About Innovator Scotland Innovator Scotland is the magazine for Scotland’s innovative business, science and technology community. Innovator Scotland celebrates innovation and portrays the people who make it happen, the innovators, across all business sectors and technology or application domains. Innovator Scotland aims to help everyone to find inspiration and the courage to voice their ideas, tackle problems creatively and seize opportunities for themselves or their organisation.

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Are you an innovator?

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Our readership have a higher than average propensity to try new technologies, products and services and willingness to embrace change. Many will travel frequently in the UK and overseas for business, project meetings and conferences.

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October/November 2011 - Issue 1 - Innovator Scotland

Be part of it Editorial features Innovator Scotland provides high quality, independent editorial including case studies, interviews and profiles, snapshots and in-depth features. The Editor is always interested to hear of ideas for editorial features and other genuinely independent content. The Editor is also keen to hear from established and aspiring contributors.

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When to Design For Manufacture (DFM) Danny Kane, Design Director, Meso www.mesodesign.com

taught me that an effective DFM process is built on a good all-round knowledge of manufacturing and assembly practises.

and an exotic material as mandatory elements to fulfil a particular function is likely to have limited processing options.

A bottom-up approach is more appropriate when product performance is the most important factor – for example, a brief that stipulates both a specific component

Title

But eventually he managed to convince them that this was the best way to grow, and today IRT is “the only building and energy thermal imaging franchise in the world,” with 10 franchisees in the UK to date, most of them appointed in the last year alone. The target in the UK is 20 franchisees, with individual franchisees currently earning about £15,000 per month. At one time, IRT had a sales team to cover the whole of the UK, but Little felt this was becoming too complex and holding back his efforts to develop new technology. “We’re more scalable now, and have a more sustainable business model,” Little explains. IRT’s financial strength in recent years owes much to the Sigma Innovation Fund, launched in 2003 “ to provide early and development stage capital for high-growth, innovative companies in the East of Scotland” – a £6 million fund with limited partner contributions from the Bank of Scotland, the European Regional Development Fund, Scottish Enterprise Fife and Sigma Technology Investments Limited. Along the way, Little has come across a number of potential investors, and he and brother Alan (now the Technical Director) have literally “walked the walk” as well as “talked the talk.”

On a trip to California in 2008, sponsored by SDI (Scottish Development International), they decided to knock on the doors of a few venture capitalists in San Francisco’s famous Sand Hill Road – the Wall Street of Silicon Valley. Several hours later, hot and exhausted, they had personally delivered their business plan to dozens of potential investors – one of whom offered to invest $20 million, if they proved the model worked and moved to California. The brothers were tempted but decided the time wasn’t right for a move and went home determined to prove that the business would scale – and go global later.

One adviser clearly did not share Little’s vision and told him: “Here are the reasons you’ll fail.” Sigma came into the picture in late 2005 and one of the attractions was Little’s down-to-earth description of IRT’s business: “We can photograph and quantify energy loss.” Within six weeks of making the initial presentation, IRT received £300,000 from Sigma,

and has focused since then on growing its client base, developing its thermal imaging software and, more recently, appointing franchisees. Turnover last year was “fast approaching £1 million” in the energy sector – up by 34 per cent on the previous year.

Above: A thermal image shows the hotspots of Berlin’s famous Reichstag building

The next phase in IRT’s growth will see the launch of new technology which Little hopes will make the company a “household name” in the energy sector. Revenues are growing and the franchise network has extended its reach nationwide without stretching its resources. According to Little, individual franchisees are targeted to generate sales of about £80,000 in year one, rising to about £120,000 in year two. “Now we can focus on becoming an innovative energy business, developing new high-tech software,” says Little. The managing director has a vision for the company which would make it the ‘Intel’ of energy surveys – with studies conducted all over the world “powered by IRT.” At one time, the company flirted with the idea of partnering with camera manufacturers to have its brand part of their package, but Little now believes the IRT brand is strong enough to stand up for itself – and be “the biggest and the best” in its specialist sector.

Dylan’s Den... Just before Xmas 2005, Stewart Little of IRT Surveys auditioned for the BBC’s popular show Dragons’ Den. Modelling his performance on the famous video made by Bob Dylan for his first hit song, Subterranean Homesick Blues, Little used flashcards to deliver his three-minute pitch, throwing the flashcards away one by one as he spelled out his message, in the same style as the legendary songster. When he was invited to appear on the show, Little planned to ask for twice the sum allowed for in the pitch

Innovator Scotland - Issue 1 - October/November 2011

to the Dragons, but days before recording, he started discussions with Sigma. When they heard about his “Dylan” act, Little’s potential investors suggested it would not be such a good idea to do the recording and said that they would be the “Dragons” for the company and give him the investment he was asking for – the end of Little’s showbiz dreams but yet another sign that he was on to a winner. The money was paid in by Sigma in good time for Xmas...

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Interview

James Fleck

The eureka myth Why lightbulb moments are not always the key to the next big thing in innovation... By JIM GILCHRIST

hen James Fleck was teaching at the University of Edinburgh, he used to offer a bottle of champagne to any of his students who could come up with an example of innovation which did not rely on any scientific or technological basis. He didn’t have to stump up too often. “I think I gave away about two bottles,” he recalls. “People really struggled with it, but it got them thinking.” Currently Dean of the Open University Business School and a former director of the University of Edinburgh Management School, Fleck also has the intriguing title of “Professor of Innovation Dynamics,” and has researched and written widely on the role of innovation in technology, notably his award-winning work in the fields of artificial intelligence and industrial robotics, as well as information systems and e-learning. And when it comes to “innovation dynamics,” certain assumptions go out of the window, particularly the belief that innovation is predicated on some elusive eureka moment. “The myth that people often have,” says Fleck, “is that you have an invention or a discovery by a scientist and it then gets applied. But, as I discovered in robotics, robots owed their existence really to a whole different tradition, different bodies of knowledge – automata, mechanical toys and production devices – quite separate from the research that was done in computer science and artificial intelligence. That was quite a surprise to me.” When Fleck first became involved some 30 years ago, innovation studies were a marginal area. “What has happened since is that innovation has come to centre stage – recognised as a major source of change, solving old problems and creating new possibilities and wealth. Countries such as Japan and Korea have been able to bootstrap themselves

46 I

up to First World levels of economic performance, by dint of policies aimed at developing an innovative base.” His early ventures into the field saw him examining the practical application of science, “so I started looking at artificial intelligence, then got interested in looking at industrial robots as one area, and what I discovered was that the dynamics – and I use that term – and the mechanisms of the way things develop were quite different in innovation, and the notion that inventions or discoveries sort of proceed from scientific research and are processed into everyday use – what’s often called the linear model of innovation – actually very rarely happens.”

Innovation has come to centre stage – recognised as a major source of change and wealth creation. Innovation may mean different things to different people, but it is often defined as the development of an idea, discovery or invention for commercial exploitation. “It might be a discovery or, in technology, an invention, but it’s not really an innovation until it has economic impact.” And it can involve the successful combination of otherwise mundane elements. Fleck cites the Starbucks model: “It’s a combination of good quality beverage, a certain ambience, locational criteria and the creation of a congenial experience. There’s no technological innovation involved, but it is nevertheless a wildly successful innovation which has transformed the way coffee is drunk virtually round the world.”

Fleck also quotes the influential Austrian-American economist Joseph Schumpeter, who emphasised the importance of the entrepreneur as someone who brings an innovation into being, creating economic benefits and, again, rejected the view of innovation as only linear or incremental development. Stressing the need for radical intervention at some stage, Schumpeter described innovations as “changes in production functions which cannot be decomposed into infinitesimal steps. Add as many rail coaches as you please, you can never get a railroad by so doing...” Ask Fleck, who was born in Nigeria and grew up in Abernethy, about any recent examples of innovation in Scotland which strike him and he cites Ron Hamilton, who developed the world’s first daily disposable contact lens in the early 1990s after the concept had been rejected by his employer, a major manufacturer of eyecare products, because it would threaten its own products. The company he and his colleague Bill Seden established in Livingston – Award Plc – was bought out in 1996 by Bausch & Lomb for more than £20 million. Today, Hamilton’s subsequent company, Daysoft, has sold more than 200 million lenses worldwide. In the electronics and computer fields, Fleck mentions the Wolfson electronics and semiconductor enterprise which emerged from research at Edinburgh University – “although it might be called a more linear model of innovation” – as well as the mind-mapping software he uses, produced by Glasgowbased MindGenius. Talking in terms of what are sometimes called “Kondratiev waves” of boom and depression (after the Russian economist Nikolai Kondratiev), and given the present grim economic climate, Fleck speculates that we’ve been riding a wave of innovation and

October/November 2011 - Issue 1 - Innovator Scotland

development based on communication technologies, and the next one on the horizon is the potentially vast field of genomics and biotechnology: “We’ve hardly scratched the surface of that one yet.” There are also, he adds, some longer-term arguments that we have been reaping the rewards of an unprecedented rate of scientific and technological exploration, “and we’re also in a worldwide capitalist system that might run out of steam.” He also refers to the eighth and ninth centuries, during which the Islamic world was a hotbed of scientific and engineering innovation – “then a couple of hundred years later it ossified into formal scholasticism.” It’s the kind of long-term ‘megathought’ he clearly finds interesting: “Will we always be living amid rapid change, or are we privileged – or cursed – to be living in a period when, because of the conjunction of things going on, there’s a lot of change?”

Innovator Scotland - Issue 1 - October/November 2011

What can governments do to stimulate innovation? Returning to the nonlinear nature of much innovation, Fleck replies: “If you take something like the Starbucks model again, or the Japanese just-in-time manufacturing strategy, there’s nothing new in them, in a sense, but the innovation has been at the configurational level. A government can stimulate innovation by encouraging companies to try out new configurations, new combinations of technical elements and organisational arrangements, and that means putting resources close to the point of use, rather than into blue sky research, which is quite a policy change.” The thought brings Fleck back to those incentivising bottles of champagne. One of the few he actually handed over was to a student who suggested the humble queue as a prime example of non-technological innovation. “It’s something that doesn’t require any technological basis, and yet it works. And today there’s a whole body of knowledge

– queuing theory and so on – and the idea is still being developed. For instance, in places like passport control and post offices, it’s more efficient to have one queue for many servers, than to have many queues, one for each server. So that’s a very practical innovation,” he jokes, “a pure idea, just requiring people to stand in line.”

Above: James Fleck, Dean of the Open University Business School and Professor of Innovation Dynamics.

Now in its 42nd year, the Open University has been, as he points out, “arguably the major educational innovation of the 20th century, demonstrating that you can deliver high-quality education on a large scale,” with dozens of imitative institutions round the world. At 59, Fleck is approaching the end of his seven-year tenure in December. Currently based at the university’s headquarters at Milton Keynes, he is hoping to spend more time at his home in Edinburgh and “looking forward to getting back to some real thinking... and work on innovation.”

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Baird: thinking out of the box

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October/November 2011 - Issue 1 - Innovator Scotland

John Logie Baird is probably Scotland’s most famous inventor but his son MALCOLM BAIRD argues that his work as an innovator deserves greater credit – and drove his quest for TV and beyond...

y father’s career followed parallel tracks of invention and innovation. Much has been written about his inventions but historians have tended to overlook his work as an innovator. As a boy in Helensburgh and as a student at the Glasgow and West of Scotland Technical College (now the University of Strathclyde) from 1906-1914, Baird had been inspired by the books of H.G.Wells. Throughout his teenage years he had regarded Wells as “a demi-god” (his own words) and he eagerly read the scientific and futuristic stories such as The Sleeper Awakes (1899) which contained a prophetic description of a table-top television. Baird was equally influenced by a less scientific H.G.Wells novel called Tono Bungay (1909), which was perhaps the first fiction ever written about innovation. It tells the story of Edward Ponderevo, a small-town chemist who devised a patent medicine from ingredients whose combined cost was a very small fraction of the selling price. The key to his success was mass advertising. This was a very new idea in the Britain of the 1900s – it was considered vulgar and not quite ‘gentlemanly’ but in the Wells story it was enormously effective. Tono Bungay inspired Baird to write a humorous article called How to Make Money for the college magazine in 1913, under the pseudonym H2O: “Some geniuses put whisky and water, with a little cinnamon and sugar, into medicine bottles, label it ‘Swamp Root Tonic Laxative – a Pure Vegetable Extract’, and sell it at a shilling a bottle. They make millions. Other geniuses make ‘Home-Made Strawberry Jam’ with wood chips, turnips, and molasses. They make millions. “Thousands upon thousands of d****d fools drudge all their lives in drawing offices. They make from 25s to £3.10s per week. All the above methods have, you will see, some disadvantage... We have, however, evolved a simple, original, and effective means of money making. No special talents are required, and only a few minutes of your spare time once a month. Full particulars will be forwarded on receipt of your name and address and a postal order to cover postage and clerical expenses. Do it now.” The Wells story may have inspired him to write but it also inspired Baird’s later business activities – and innovations. After college, Baird worked for the Clyde Valley Electrical

Innovator Scotland - Issue 1 - October/November 2011

Power company, where he hatched a scheme to manufacture diamonds out of carbon using huge amounts of electricity, inspired by another Wells story, The Diamond Maker. Baird’s job was to repair electricity breakdowns in the Rutherglen area, but when he ‘borrowed’ the supply from his employer in his bid to make diamonds, the result was a crash in the network – and, sadly, no diamonds. Another failed venture was a cure for piles, invented by one of his colleagues, which left Baird unable to sit down for several days. Baird quickly recovered from these disappointments, then quit his job and started a small business, to make a cheap and simple product which he thought would have great mass appeal: The Baird Undersock. This “revolutionary” product was advertised as “a medicated sock” which would keep people’s feet dry in Glasgow’s wet weather, but it was in fact merely a plain cotton sock sprinkled with borax. Baird’s memoirs (Television and Me) contain lots of useful advice about the “do’s and don’ts” of starting a small business, including the importance of advertising – and innovation. For example, he designed a full-size wooden replica of a tank, plastered it with Baird Undersock signs and trundled it through the streets of Glasgow. Another innovation was his novel use of “sandwich boards.” These were usually carried by men but male labour was in short supply during the war, so Baird used women instead – attracting much attention in the process. Due to ill health, Baird wound up the undersock business in 1918, having made 15 times more than he could have earned as an employee at the power plant, and his next venture was a jam factory in Trinidad, using fruit and sugar which were plentiful and cheap there. This time, things went badly wrong. Baird had not properly researched the local conditions and he had not realised the prevalence of insect life and the risk of tropical infections. He returned to London in late 1920 with most of his capital gone and a notebook full of scribbled ideas for hair restorer and boot polish, etc. But one idea would soon begin to dominate his life – television. After a few years developing the new technology, Baird gradually managed to show a recognisable head-andshoulders ‘television’ picture. To fund his research, Baird had depended on his own dwindling savings and some support from his family, plus £200 from a private

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Next issue... Case studies

Interviews

Our first case studies tell the innovators’ journeys from We meet innovators getting started research to commercialisation, gaining market traction in business, ask our expert panel to or staying ahead and growing an established business. comment on a genuine entrepreneur’s situation, and consider innovation in We share the challenges, the action and excitement manufacturing with Peter Hughes, CEO at D-Light (visible light communications) and of Scottish Engineering. NovaBiotics (biotechnology).

Features “It’s not rocket science, it’s business,” says Professor Colin McInnes at the Advanced Space Concepts Laboratory. Bill Magee, Scottish Technology Writer of the Year, visits Kotikan to find out how a Scotlandbased mobile apps developer stands out in a crowded global market. We see how medical researchers and software developers at SightSim in Glasgow are helping parents see through the eyes of their visually-impaired children.

InsightsMore gems from our expert contributors: Mark Batey on creativity at work, Andrew Glidden on branding and design, Mel Young on social innovation. Plus Alisdair Gunn of Innovation Centres Scotland and Andy Kerr of the Edinburgh Centre for Climate Change.

PLUS Innovator’s Digest: More about what’s happening and on offer to innovators in business from Scotland’s universities. And we tackle the jungle of networks out there to help you find which ones are right for you.

Issue 2 of Innovator Scotland will be available at numerous locations across Scotland... and beyond. Ensure you get your copy by taking out a personal subscription – see our great offer on Page 25. 50 I

October/November 2011 - Issue 1 - Innovator Scotland

in late 1945 when he showed us a television picture, in colour, on his new patented cathode ray screen – the Telechrome. My father’s technical assistant Eddy Anderson acted as the studio subject and I’ll never forget the brightness and the sharpness of the picture, including even the smoke drifting up from his pipe.

Left: Baird demonstrates one of his early inventions: Noctovision.

Public broadcasting of television was expected to resume after the end of the war and Baird embarked once again on innovation, seeking interest and backing for a new company. He was much better able to make contacts than he had been 20 years earlier, and gathered around him an impressive team of advisers and backers, to form a new company called John Logie Baird Ltd. The company board included the well-known patent lawyer Kew Edwin Shelley KC, plus the two main backers – the young financier John Donaldson-Hudson and the film star Jack Buchanan who had been Baird’s fellow-pupil in Helensburgh, 40 years earlier.

investor, Will Day. Some of the large electrical companies also donated badly-needed equipment such as valves and batteries, but as time went by, the relationship between Baird and Day began to deteriorate. Day was impatient for progress but Baird was struggling with technical difficulties, including a near-disastrous explosion in his laboratory. The breakthrough came in October 1925 when Baird finally achieved ‘half-tone’ television pictures, as opposed to simple black-and-white silhouettes. This was followed in January 1926 by the now-famous first demonstration of television to the scientific community, including members of the Royal Institution, in London. Soon afterwards, a new company called Television Limited was successfully floated on the London Stock Exchange. Will Day was later bought out, receiving £500 for his original £200 investment. Throughout the late 1920s, Baird’s company went through several name changes while he used his technical and advertising skills to keep television in the public eye. In 1927, ‘live’ television pictures were broadcast from London to Glasgow by telephone line and in 1928, from London to New York using short-wave radio. Colour television was also shown in 1928, and Baird later captured the public imagination with a new device called “Noctovision,”

Innovator Scotland - Issue 1 - October/November 2011

in which the subject sat in front of the camera in complete darkness and the illumination was provided by infra-red rays (heat). In 1932, Baird Television Limited was taken over by the cinema combine Gaumont British. As managing director, Baird received £4,000 per annum – approximately 25 times the average income – but his title was nominal as he had no administrative duties and continued to focus his time and resources on research. A major setback came in 1937 when the BBC adopted the all-electronic television system of his company’s rival, Marconi-EMI. However, the Baird Company remained viable as a receiver manufacturer, and Baird himself continued to spend most of his time working on colour television in his private laboratory. In September 1939 the BBC abruptly closed down its television service. In Baird’s own words, television sets became “useless junk” overnight, and the company went into receivership. However, Baird decided to carry on his research at his own expense, and his bank account gradually shrank as the war went on. By 1944, Baird had achieved impressive new results with colour television and 3D (stereoscopic) television. For safety reasons, my sister Diana and I were not usually allowed into my father’s laboratory but he made an exception

All seemed set for a comeback. But this time Baird’s old enemy, his health, got the upper hand, and he died in his sleep on June 14, 1946, just a few days after the BBC had resumed its television service following the wartime shutdown. Baird’s legacy, however, still lives on in various ways – not just in television but also to encourage a new generation of innovators in Scotland, via the John Logie Baird Awards, administered by the GO Group in Glasgow. If a programme like this had existed 90 years ago, imagine for a moment the effect it may have had on Baird’s career . . . For example, with the right advice and contacts, perhaps the Baird Undersock could have been such a success that Baird would have become one of the king-pins of the Scottish textile industry. If he had received better advice before he went to Trinidad, he could have created a new range of chutneys and jam. And last but not least, if a proper innovation support programme had existed in London in the mid-1920s, it could have smoothed the way for television. Who knows? Innovation, like life, can take unpredictable paths. This article is dedicated to the memory of Antony Kamm, who died on February 12, 2011.

Recommended reading John Logie Baird: A Life by Antony Kamm and Malcolm Baird, NMS Publications, Edinburgh (2002).

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Going, going global Made-in-Scotland social networks are attracting worldwide investment By BILL MAGEE

Above: Brian Hughes and Stewart Fraser have secured £1m of funding for their website Kiltr. Top right: Pete Cashmore has been ranked in the top three of Forbes. com’s Web Celebs. Bottom right: Joe Tree’s Blipfoto won the Scottish BAFTA Best Web Award.

n the States they are labelled “Social Media Rock Stars,” given the red carpet treatment and led by a 25-year-old Scot. They are members of a social networking global elite – predominantly male – headed up by Internet poster boy Pete Cashmore, who as chief executive of Mashable topped a Twitter poll beating no less a mortal than celebrity Stephen Fry into second place. Tennis star Andy Murray came a lowly eleventh. Cashmore has been described by Daily Mail Online as “the most influential Briton on a social networking site... a Scottish internet entrepreneur and social media guru.” His technology blog attracts 30 million-plus monthly pageviews, over two million Twitter followers and around half a million Facebook fans. In America, Forbes.com has upped Cashmore’s ranking from 6 to a Top 3 spot in its “Web Celeb Top 25” ranking of the Internet’s most famous, with Mashable valued in tens of millions of dollars (see

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profile) that in sheer monetary terms provides a phenomenally successful online platform that other social networking sites can only aspire to. His success reflects an undeniable fact that the market and with it millions of highly-mobile and willing participants view social networking online as a way of life. It’s estimated that Scots now spend a quarter of their waking lives on the Internet with Social Media, read Web 2.0, with all its richness in content and scope, forming the nucleus of action on the Information Superhighway 24/7. Maybe it’s that term “social” conjuring up the promise of a bit of light relief, either in business terms or away from our economically depressed high streets, for hard-pressed managers and consumers alike. Mostly, the still relatively new phenomenom smacks of having a bit of fun, especially relevant in these current financially tough times, while a technology leviathan like Cisco Systems has submerged its operations

in social networking to generate new ideas to boost its revenues and return on investment. Market analyst In-Stat reports there are now more social networking accounts than there are people on the planet. That’s 10 billion and counting, with the vast bulk of individuals apparently unconcerned about revealing their innermost thoughts. So perhaps it’s not surprising that a still relatively new phenomenom is leading to a boom in largely independently owned sites with the best known including Facebook, Twitter, YouTube and LinkedIn. The Internet Advertising Bureau reports such sites attracted ad revenues in 2010 totalling £4 billion-plus. Standing out is Facebook, with over 600 million users, as it continues to reap the benefits with a price tag of between £37 billion up to as much as £60 billion when it finally floats. Twitter is reputed to be worth a mere £2.5 billion but is expected, on flotation, to attract a mighty premium on its market valuation.

October/November 2011 - Issue 1 - Innovator Scotland

There are now more social networking accounts than people on the planet. That’s 10 billion and counting. MASHABLE PETE CASHMORE What else can be said about this “tech media wunderkind” (Forbes again) other than he can perhaps be viewed as heading up a Tartan onslaught on the online world of social networking.

Furthermore, a note of caution has been uttered by no less a luminary than Warren Buffett, who warns investors that social media valuations are unwarranted.

It’s a long way away from the 19/20-year-old who in 2005 founded his enterprise from the bedroom of his parents’ home in Banchory, near Aberdeen, and is now expanding his virtual empire into a seven-figure business with offices all over the world.

The American financial guru goes further by claiming they “will be overpriced” and with wavering revenues, never mind generating an actual profit, he claims it will prove extremely difficult to value the companies behind them.

Cashmore has proved a hit with the browser because his Tweets talk about technological changes in terms of everyday issues like shopping, music and social networking itself.

Ultimately it will be the market that decides on such valuations – a case in point is Facebook – and at the grand old age of 80 and reputed to hardly ever use a computer, it’s possible Buffett’s utterances reveal more of a generation gap than sound investor principles. (After all, he steers clear of tech stocks generally, including Apple which he claims is unpredictable, despite being the world’s most successful company!) But this does raise interesting and key questions: Can a place like Scotland produce successful social networking sites each endowed with a “niche” offering and standing out well beyond these shores? And is a pack mentality developing, one where there’s evidence of a cluster effect, one that is catching the eye of venture capitalists and business angels looking for a sound return on their investment? The answer appears to be a firm “Yes,” if the quartet of online business ventures highlighted here are anything to go by, and where what comes across loud and clear, time and time again, is that driving these individual projects is an entrepreneurial passion, a strength that’s hard to put a price tag on.

Innovator Scotland - Issue 1 - October/November 2011

As to be expected, his elevation became all the more significant when he was spotted on the other side of the Pond, where it’s the American way to appropriate success stories as one of their own – Wikipedia even describes Mashable as “an American news website and internet news blog.”

PICTURE: BLOOMBERG / GETTY IMAGES

Those behind such online enterprises may be described as social media rock stars, but for every Bon Jovi there has to be a Kajagoogoo with the likes of MySpace, Flickr and Bebo experiencing a decline in accounts, according to Neilson market research.

Forbes’ “wunderkind” comment is accompanied by a description of Mashable, now based in Silicon Valley, as a “must-read” for the tech cognoscenti, with Cashmore widely regarded as an expert on how to use, consume and profit from social media. Last year, Mashable renamed its own International Open Web Awards the “4th Annual Mashable Awards,” covering categories like best mobile game, web video, most promising new company and entrepreneur of the year. Cashmore agrees that it is “fantastic” to feature so highly on the Forbes list but doesn’t consider himself to be a celebrity. “It’s kind of funny. A group of us went to the Grammys and we went down the red carpet and were called social media rock stars!” He thinks Mashable scores because it offers an “outsider’s perspective” on what happens on the web. Website Shadow estimates the website’s value at circa £30/35 million.

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MIKE ANTLIFF Kabu: “Transforming the way business folks communicate.”

KABU’s Mike Antliff describes himself as a veteran of the digital media and tech-enhanced communications sector and is well on the way to securing secondround funding for his new enterprise. He established the website, formerly named Caboodl, two years ago and Kabu represents an enterprise social software company with a community platform at its heart specifically for business needs. “We’re passionate about this site,” he says. “It’s fresh foward-thinking software that supports marketing, customer services, sales, human resources and research and development teams.” Antliff has a personal pedigree to pull it off. A product of Glasgow School of Art, he qualified as an architect and with experience in 3D imaging co-founded Digital Animations in 1999 at the age of 24, starting to produce full-motion video for leading games companies like Eidos and Infogrammes plus TV commercials for US ad agencies. Six years later DA was taken into the Alternative Investment Market (Aim), raising funds to grow the team and open up new markets, developing a patented animation technology for avatars. DA won global acclaim for its creation “Ananova,” the world’s first virtual newscaster for the Press Association, which later sold it on to Orange. It was around that time DA headed up the Deloitte Fast 50 in Scotland, representing the UK in the accountancy giant’s global Fast 500 at Carlsbad, uptown San Diego (when yours truly accompanied him to write a mainline feature for The Sunday Times). A restructuring of the business in 2005 saw “Yomego” attracting deals with the BBC, Viacom, MTV Networks, Freemantle Media, Five, Packet One and GMTV. Antliff and DA Group finally ran out of puff, but utilising some of those contacts, who would bet against it becoming established as a leading enterprise social software company? “My goal is to build Kabu into the world’s most dependable and inspiring enterprise social software company transforming the way business gets done. My ultimate aim is to break new ground by transforming the way business folks communicate, collaborate and share in today’s social digital world.” Still in beta form, it’s too early to value Kabu.

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KILTR BRIAN HUGHES AND STEWART FRASER This fledgling Scots social networking site secured second-round funding believed to be in the region of a cool £1 million – a prime example of how venture capitalists and angels typically watch how a website goes at seed capital stage before making their move. In the case of co-founders Brian Hughes and Stewart Fraser, the VC interest fully vindicates the duo taking a leap into the unknown. Their start-up company connects businessmen and women with Scottish heritage from around the world, and they have attracted a group of backers including Edinburgh’s Par Equity, Barwell and the Scottish Seed Fund plus personal funds from the pair. They met while students at Glasgow Caledonian University in 1992, when they first came up with the idea of Kiltr. Rob Lowe, a Par Equity advisory panel member and Kiltr’s non-executive chairman, says he is “absolutely hooked” by the new professional networking service, and is looking for great things from it. From its Livingston base but with a presence now also in Silicon Valley, Kiltr’s objective is to leverage Scotland’s unique cultural heritage linked to its entrepreneurial spirit, by building on the success of the social networking concept that’s produced the likes of Facebook and Twitter. Lowe adds that vital to the venture are the founders themselves: “They’re both passionate Scotsmen, building a world-class product and a great Scottish company.” Alan Bain, president emeritus of the American Scottish Foundation, agrees. He flew over from his New York Madison Avenue “Scotland House” base for Kiltr’s launch. Around 30 per cent of the thousands registering on the site live in the US, plus significant numbers from India and China. Hughes, who for some years ran the “Hi-Tech Scotland” website, says: “Kiltr is all about harnessing the power of social networking to bring together an estimated 100 million Scots or affinity Scots around the globe gaining vital contacts and growing their business in the process.” Still in beta form, albeit advanced, no value has yet been placed on Kiltr...

Kiltr is all about harnessing the power of social networking. BLIPFOTO JOE TREE Joe Tree, 37, has attracted a cult following with his online photo-journal-sharing website attracting the attention of angels and venture capitalists from both sides of the Atlantic. The site was first established in 2004 as a pet project at Rocket Visuals, then web designer and photographer Joe’s “day job,” allowing him and co-founder Graham Maclachlan to work on something exciting and innovative before it assumed a life of its own. In 2006, the site was more formally launched, and since then it has seen its popularity boom among photography and social networking enthusiasts, with 16,000 unique visitors monthly.

October/November 2011 - Issue 1 - Innovator Scotland

People’s increasing appetite for social networking has been aided by inventions like the smart phone.

The Edinburgh-based enterprise was profiled at a recent investors’ showcase in Oxford, when Tree reported online activity was increasing at a rate of 20 per cent a month, and he needed to scale up and increase the site’s capacity while maintaining growth. Such was the enthusiasm shown by the participants that the firm has significantly upped its financial horizons, and from first-round funding of £200,000, second round backing has seen sums of a “few million” bandied about – an indication of both investor interest and potential price tag. Meanwhile, Blipfoto is staging talks with several big brands, including Channel 4, about a series of potential partnerships as it embarks on expansion plans. Blipfoto’s concept is simple – users upload one photo a day, taken on that day, adding text to describe the image

Innovator Scotland - Issue 1 - October/November 2011

and story behind it. It’s proving so popular that enthusiasts regularly meet up and there has even been a marriage between two users in America who met through the site. A string of backers include American Ken Morse, the founder of the MIT Entrepreneurship Centre and a serial business angel. When asked about Blipfoto, he replied in four words: “I invest in TALENT.” Tree, who started out as a photographer, says: “People see Blipfoto as a contemplative space, somewhere you go to get away from the busy noise of the internet.” The photo journal site is the recipient of a Scottish BAFTA Best Web award. Of the website’s development, Tree says: “Don’t underestimate the time it takes to make your venture work!”

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Insight

Alisdair Gunn

Partner or do it yourself? Many corporate partners have been overwhelmed by the number of new products being created in Scotland. By ALISDAIR GUNN, Senior Innovation Manager at Innovation Centres Scotland

aking important decisions is part and parcel of setting up or growing a business – for example, staff recruitment, product development and marketing. But when IT developers want to take their product to the next stage, one of the big questions is whether to partner with a corporate player or go it alone. There are many scenarios where a developer might choose the ‘partner route’ to market the product, including an investment deal. The corporate partner may want to purchase the product or trial it. They may offer an opportunity to market the product globally, something very difficult to do without a significant marketing budget. Partners may also be able to create a road-map of future products, taking advantage of their market intelligence. The developer may also need technical help or feel that having a partner on board would boost their confidence. At Innovation Centres Scotland, we help both developers and technology businesses find suitable partners globally or locally. This involves providing incubation and market sector support to some of Scotland’s leading entrepreneurs, and one of the key services is to provide introductions for SMEs to a range of global partners. We have brought a number of large corporate partners to Scotland and have introduced many of Scotland’s leading entrepreneurs to companies such as Qualcomm, RIM, Orange, Telefonica/O2, Vodafone, Gartner,

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Strategy Analytics, Nokia, Motorola, Google, Boots Innovation, Oracle, BBC, Channel 4 and BAA. Developers and technology businesses are always keen to meet the corporate partners because they realise their knowledge of the global market and ability to predict future trends can be crucial to help them develop new products and services that are driven by market demand. A good example of a partnership facilitated by ICS was between Satsis and Orange. Satsis provides a range of cost-effective solutions to overcome GPS issues for locating mobile devices in public buildings.

In Scotland we have a tendency to be insular, but young companies have to get out there. We introduced Satsis to Orange at a brokerage event, and Orange agreed to test the Satsis wi-fi solution at Orly airport and several shopping centres in and around Paris – a trial which helped Satsis shape its Loc8R product. At ICS, we are encouraged by the enthusiasm of both sides and will continue to make introductions to

help and encourage Scotland’s brightest entrepreneurs to keep innovating. Many corporate partners have been overwhelmed by the innovation and number of new applications, services, products and platforms being created in Scotland. There is always one idea that seems to get their attention – and 99 per cent of the time an agreement is made. There are pros and cons to every arrangement. Partners will normally choose companies with products, solutions, platforms or applications which meet their business criteria. There can be issues around IP ownership if the corporate partner invests to help develop your product, and the procurement processes can be a real headache. Deciding to market the product direct without a partner can give you much more freedom, full ownership of the IP surrounding the technology and the flexibility to grow as quickly as the business allows. However, a small developer will find it hard to build credibility in the market and find raising investment an arduous task without the backing of a big name. Choosing the right route is difficult for any company. The decision will be determined by the aspiration, enthusiasm, dedication and passion of the entrepreneur to determine how he or she wants to grow their business and if they are willing to share their success with someone else. Some individuals are happy to partner to develop a product and get it quickly to market – and let the partner find the customer so they can get on to the next big thing.

October/November 2011 - Issue 1 - Innovator Scotland

n 3, M90 Just off Junctio

‘Your Total Event Solution’ Location 15 minutes from Edinburgh Airport, 25 minutes from Edinburgh, 45 from Glasgow - accessible by two train stations, just 10 minutes walk from the Conference Centre Just off Junction 3 M90, 140 complimentary car parking spaces

Innovator’s Digest Innovator Scotland provides a platform for universities and other research institutes, networks which facilitate knowledge exchange and promote innovation, plus organisations which exist to help business thrive, to spread word of their services and current opportunities to work together.

In this issue: 58

Scottish university points of contact for business

Why The University of Edinburgh is the University of Enterprise

UK-wide Knowledge Transfer Networks

The Biofuel Business Programme at Edinburgh Napier University

Scotland’s Chambers of Commerce – the Ultimate Business Network

Capacities 25 Meeting rooms, catering from 6 to 400 delegates. All rooms have natural daylight Extensive range of AV and presentation equipment Our own on-site IT support team, to assist with your event needs Catering Fantastic range of menus to suit all events, whether for conference or celebratory events Licensed premises Accommodation Holiday Inn Express with 82 bedrooms Special rates available, when using Carnegie Conference Centre Value for money Our Day Delegate packages, include VAT plus all AV equipment from only £30 per person

Please take a look at our website: www.carnegieconferencecentre.co.uk and contact Sarah-Jane Friedman on: 01383 845136 who will be happy to discuss your event with you.

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List

Universities & Business

Scotland’s higher education institutes (HEIs) are actively engaged with business and industry of all sizes and disciplines. Whereas in the past university interaction with industry was a one-way street of licensing technologies to large companies, today “knowledge exchange” is two-way with universities benefiting from industry and market insight as well as working more creatively and flexibly to ensure knowledge generated through research, and related resources, can be accessible to and benefit business:

Knowledge Transfer Knowledge Transfer Partnerships Technology Transfer and Licensing Spinout company formation Contract research Clinical trials and studies Consultancy Specialist expertise

Access to specialist facilities and equipment Access to funding for innovation Training Continuing Professional Development Recruiting graduates Industrial placements Venues for conferences, meetings and events

To find out more about how each university engages with business, the following table helps you to go straight to the relevant section of their website:

HIGHER EDUCATION INSTITUTES IN SCOTLAND

WEBSITE FOR ACTIVITIES WITH BUSINESS

University of Aberdeen

www.abdn.ac.uk/r&i/business

University of Abertay Dundee

www.abertay.ac.uk/business

University of Dundee

www.dundee.ac.uk/research/main/technology-transfer/

University of Edinburgh

www.ed.ac.uk/business

Edinburgh Napier University

www.napier.ac.uk/businessactivities/Pages/Business.aspx

Glasgow Caledonian University

www.gcu.ac.uk/business

The Glasgow School of Art

www.gsa.ac.uk

University of Glasgow

www.gla.ac.uk/businessandindustry

Heriot Watt University

www.hw.ac.uk/industry.htm

Queen Margaret University

www.qmu.ac.uk/business_industry/default.htm

Robert Gordon University

www.rgu.ac.uk/business-services

University of St Andrews

www.st-andrews.ac.uk/ktc

University of Stirling

www.stir.ac.uk/research/working-with-business-and-industry

University of Strathclyde

www.strath.ac.uk/businessorganisations

The University of the Highlands and Islands (UHI)

www.uhi.ac.uk/en/research-enterprise/research-enterprise/knowledge-exchange

University of the West of Scotland

www.uws.ac.uk/research

Scottish Agricultural College (SAC)

www.sac.ac.uk/knowledge

Scotland has two valuable services designed to help business find the contacts that offer the best fit to their own specific requirements: Interface - The knowledge connection for business provides a free and impartial service matching businesses with academics making available the world class knowledge, expertise and research facilities in all of Scotland’s Universities and Research Institutions.

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University-technology.com is aimed at companies seeking to in-license new technologies to develop into new products, applications or services. The site highlights technology licensing opportunities and collaborative development opportunities currently available from 13 Scottish universities in one convenient location.

October/November 2011 - Issue 1 - Innovator Scotland

The University of Edinburgh

www.ed.ac.uk

University of Enterprise H

LAUNCH.ed, offering one-to-one help from a business advisor, mentoring, workshops and clinics, as well as providing access to hot desks and a library of resources and online tools. Over the years, Edinburgh’s new enterprises have gone on to achieve notable success – though often in different ways. High growth companies like Wolfson Microelectronics have remained independent and now compete successfully within global markets, producing high value jobs locally. Other companies have been acquired by market-leading companies and integrated into their operations. While Edinburgh spin-out MTEM is now part of a larger international group, but the company operates as a subsidiary and continues to provide employment within the Edinburgh region. Whatever the future may hold for these companies, they may become significant local employers or help the entrepreneurs acquire key business

Major investment finances next stage of spin-out’s global expansion programme

University spin-out company, which is quickly becoming a world leader in hyper-local and indoor positioning solutions, has successfully raised £1.2 million from private equity investors to finance the next stage of its expansion programme.

Young entrepreneurs let their lips do the talking

peech Graphics, a start-up company formed by two entrepreneurs working within the University of Edinburgh’s School of Informatics, is uniquely positioned to become the leading lip-sync service and software provider for the global video game industry. Michael Berger, a linguist and computer scientist working in the field of speech animation, and Dr Gregor Hofer have developed a scalable technology that tackles the fastest growing challenge for the video game industry today - providing unprecedented lip synchronisation quality for audio-driven animation. Modern games can include thousands of hours of recorded

Innovator Scotland - Issue 1 - October/November 2011

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List

Knowledge Transfer Networks

An introduction T here are currently 15 Knowledge Transfer Networks (KTNs). They have been established and are funded by government (through the Technology Strategy Board), industry and academia. They bring together diverse organisations and provide activities and initiatives that promote the exchange of knowledge and the stimulation of innovation in these communities.

The KTNs are now hosted on _connect, a powerful networking platform. _connect is a place that facilitates open innovation, where people can network, share information and knowledge and work together securely. Utilise the online tools to work collaboratively or discuss ideas and find events. https://ktn.innovateuk.org

KNOWLEDGE TRANSFER NETWORK

PURPOSE AND SCOPE

Aerospace, Aviation and Defence

Enabling innovation and collaboration across the UK Aerospace, Aviation and Defence enterprise.

Biosciences

Driving the conversion of the UK’s bioscience knowledge into innovative agricultural, food and industrial bioscience products and processes.

Chemistry Innovation

Driving innovation and value across the chemistry-using industries: chemical and pharmaceutical sectors, chemistry dependent sectors such as home and personal care, food and drink, polymers, crop protection and lubricants, as well as sectors which require substantial chemistry input, including oil, gas, materials and electronics.

Creative Industries

Stimulates and encourages innovation in the creative industries, helping people to realise the potential of the creative industries to motivate lasting change.

Electronics, Sensors, Photonics

Spans the underpinning technology domains that impact all of the application domains, but which can become invisible owing to their very ubiquity; including Electronics, Sensors or Photonics, Systems Engineering, Autonomous Systems, Embedded Software, Instrumentation, Mechatronics.

Energy Generation and Supply

To simplify the UK Energy Innovation landscape by facilitating the rapid transfer of high-quality information on technologies, markets, funding and partnering opportunities, leading to an acceleration of developing technologies up the Technology Readiness Level (TRL) ladder.

Environmental Sustainability

To accelerate the UK’s transition to a low carbon, resource and energy efficient economy by connecting and catalysing innovation across a wide range of environmental technologies.

Financial Services

To foster the technological innovation required to reinforce the UK’s reputation as a centre for financial services excellence; by helping to stimulate interaction between the UK’s financial services industry, scientific experts and technology vendors.

HealthTech and Medicines

Dedicated to accelerating innovation and technology exploitation in the broad health industries sector.

ICT

Creating a competitive advantage for the UK by facilitating knowledge exchange on Information and Communications Technologies and accelerating innovation.

Industrial Mathematics

Exploiting the power of mathematics.

Materials

To bring together the materials supply chain to improve industrial innovation and global competitiveness of UK business.

Modern Built Environment

To increase the exploitation of innovation in the built environment for demonstrated business benefit.

Nanotechnology

Accelerating innovation in nanoscale technologies.

Transport

Seeking innovative business opportunities from greater intermodal transport integration; addressing congestion, safety, freight logistics and greenhouse gases.

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A Knowledge Transfer Network is a single over-arching national network in a specific field of technology or business application which brings together people from businesses, universities, research, finance and technology organisations to stimulate innovation through knowledge transfer.

The specific aims of a Knowledge Transfer Network include the following: • To deliver improved industrial performance through innovation and new collaborations by driving the flow of people, knowledge and experience between business and the science-base, between businesses and across sectors; • To drive knowledge transfer between the supply and demand sides of technology-enabled markets through a high quality, easy to use service; • To facilitate innovation and knowledge transfer by providing UK businesses with the opportunity to meet and network with individuals and organisations, in the UK and internationally; • To provide a forum for a coherent business voice to inform government of its technology needs and about issues, such as regulation, which are enhancing or inhibiting innovation in the UK.

October/November 2011 - Issue 1 - Innovator Scotland

Biofuel Business Programme The Biofuel Business Programme has been challenging businesses to ‘stop dumping and get creative’ with waste

EAE contacted the Biofuel Business Programme to investigate new emerging technologies to generate fuel from waste and further reduce their carbon footprint.

In the very near future, EAE will be reducing their usage of fossil fuels by utilising B30 biodiesel (30% biodiesel, 70% mineral diesel) in fleet engines.

Innovator Scotland - Issue 1 - October/November 2011

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List

Chambers of Commerce

The Ultimate Business Network

s Scotland’s leading independent business support and networking organisations, the Chambers of Commerce help member businesses to save time and money, gain business knowledge and expertise and introduce them to potential customers and suppliers. Chambers are generally completely independent and are not-for-profit organisations. They are member-led and inclusive, with a membership

base that spans enterprises of all types and sizes, from the private, voluntary/social and public sectors. Together Scotland’s Chambers provide well over half the private sector jobs in Scotland and provide and unequalled geographical and sectoral representation through Scotland. There are 20 Chambers of Commerce in Scotland. Membership is open to any firm or company irrespective of size.

From Caithness to Dumfries and from Mull to Dundee, local Chambers are helping businesses to grow and prosper through regular networking, business training, mentoring support and free documentation - plus a range of specialist services, including legal, employment and healthcare, designed to reduce overheads, eliminate exposure to risk, avoid expensive litigation and enhance employee wellbeing. No other business organisation offers such a range of support – vital in the development of your ideas and the promotion of your company’s ambitions.

CHAMBER OF COMMERCE

WEBSITE

PHONE

Aberdeen & Grampian

www.agcc.co.uk

info@agcc.co.uk

01224 343 900

Ayrshire

www.ayrshire-chamber.org

enquiries@ayrshire-chamber.org

01292 678 666

Caithness

www.caithnesschamber.com

info@caithnesschamber.com

01847 890076

Cairngorms

www.cairngormschamber.com

info@cairngormschamber.com

01479 780539

Dumfries & Galloway

www.dgchamber.co.uk

admin@dgchamber.co.uk

01387 270866

Dundee & Angus

www.dundeeandanguschamber.co.uk

info@dundeeandanguschamber.co.uk

01382 228545

Edinburgh

www.edinburghchamber.co.uk

customerservices@edinburghchamber.co.uk

0844 736 2992

Fife

www.fifechamber.co.uk

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October/November 2011 - Issue 1 - Innovator Scotland

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Talking Point

Mel Young

Can social innovation change the world?

MEL YOUNG is founder and President of the Homeless World Cup – a social enterprise developed and managed in Scotland, now involving 80 countries worldwide...

hen you ask someone about the meaning of innovation, they usually use words like invention, technological advance, renewal, enhancement, improvement of products and so on.

across the globe. Scotland has a particular DNA which understands enterprise but also understands the value of a functioning community. It is the perfect country where innovative social entrepreneurs can flourish.

People rarely mention innovation in the context of social issues. Yet, social innovation has the power to create genuine and lasting change in any society. Over the past 10 years, social entrepreneurs have used innovation to tackle deep-rooted social issues. And governments are increasingly looking to social entrepreneurs to come up with solutions as they struggle to deal with mounting social challenges as public revenues decrease.

Whilst the profile and understanding of social entrepreneurship has risen, the debate about the development of social enterprise in Scotland and the rest of the UK has been clouded by politicians and become a very narrow debate about the delivery of public services. Social innovation was never about this. Social innovation has the power to transform societies because social entrepreneurs concentrate on innovation, scale, sustainability and impact. As Scotland moves forward into a new era, social innovation directed in the right way can be a powerful agent of change.

The Grameen Bank has 8.36 million customers, 97% of whom are women. Since it started, Yunus has disbursed loans of $10.52 billion. He has a loan recovery rate of nearly 98% – higher than any commercial bank in the world. And like any good innovation, the micro-credit concept has been copied and applied throughout the world. Yunus has gone on to create other social enterprises like Grameen Phone, which is based on similar principles and again has lifted thousands out of poverty. And in 2006, he was awarded the Nobel Peace Prize.

Right: Scotland won the Homeless World Cup in Paris this year. Next year’s tournament will be held in Mexico City.

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There are many other social entrepreneurs throughout the world and many global networks and partnerships have been formed. They operate in many different fields but innovation is their common middle name – e.g. Bunker Roy founded the Barefoot College in India which transforms thousands of poor and illiterate people into skilled engineers through a “learning by doing” approach to education, Bart Weetjens established Hero Rat in 1998 to train rats to detect landmines and disease, and Andrea Coleman set up Riders for Health to use motorbikes to get essential medical equipment to isolated areas throughout Africa. And the list goes on and on and on...

Scotland has a DNA which understands enterprise, but also the value of functioning as a community Innovation isn’t all about creating new gadgets or making money. When it is applied in the social context, it can be transformational. If Scotland embraced social innovation with the same amount of energy as business innovation, then the outlook for the future of the country would be very bright indeed. PHOTO: ESME DEACON

The leading social entrepreneur in the world is Muhammad Yunus, who invented the concept of micro-credit when he established the Grameen Bank in Bangladesh in 1976. He looked at the existing banking system and innovated to create a bank which was relevant to people living in poverty. And in the process he has lifted hundreds of thousands of people out of poverty.

These people are completely dedicated to their innovations and with tiny resources are making huge impacts right

October/November 2011 - Issue 1 - Innovator Scotland

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